When a person becomes deceased without a valid will, their belongings will be distributed according to the state probate process. During probate, the court may appoint an executor or administrator to help with the property distribution process. This person is sometimes required to post a “probate bond” with the court.
The purpose of a probate bond is to ensure that the executor will fulfill their duties according to the state probate and estate laws. This includes properly identifying the estate property, naming potential beneficiaries, and dealing with any leftover property debt. In short, the probate bond helps ensure that the executor/administrator won’t simply run off with the deceased person’s property.
A fiduciary bond is a type of judicial bond that is imposed on a fiduciary. A fiduciary is a person who is entrusted with financial responsibility and decision making for another person. This can include many different persons, but it generally applies to the executor or administrator of an estate (i.e., the person in charge of executing a person’s will).
Basically, the court requires the fiduciary to deposit a certain monetary amount with the court. This will act like insurance, and will ensure that the fiduciary performs their fiduciary tasks and responsibilities. The fiduciary bond may help prevent instances of fraud, theft, or embezzlement of the estate holder’s property and money.
Fiduciary bonds and probate bonds are very similar, and may be called by different names depending on the context; these can include: executor bonds, administrator bonds, conservatorship bonds, guardianship bonds, and many others.
If there’s anything else you need to know about probate bonds, contact us today.