Want to learn more about probate bonds? Contact the Woodlands probate attorney who has experience in assisting clients in obtaining a probate bond.
What is a probate bond , and when would I need one?
A probate bond is a bond issued on the performance of an administrator or executor, and its purpose is to protect heirs and creditors from being harmed by the negligence or malfeasance of the administrator or executor.
For instance, if “John” is the executor of his father’s estate, and, instead of paying the doctor bills and splitting his inheritance with his brother he makes off with everything his father owned, his brother and the doctors can recover the amounts they would have been entitled to from the bonding company. Sounds good, right? The only problem is that obtaining the bond can be a costly stumbling block for potential executors or administrators. (An executor means there is a will, otherwise you have an administrator).
I have seen more than one case where the administrator or executor was simply unable to obtain a bond. Why wouldn’t you be able to get a bond? Well, applying for a bond is much like applying for a signature loan. If you need a $500,000 bond, but recently got turned down for a $250,000 house loan, you are probably not going to have much luck. Another reason you may not be able to get a bond is the cost of it. If the Judge has ordered a probate bond, you are not going to have access to the funds of the estate until AFTER the bond has been issued. The bond cannot be issued until after it has been paid for. Of course, if paying for the bond is a real issue, you probably wouldn’t be able to qualify for one anyway. In addition, the bond must be renewed, and new premiums are paid every year, meaning that the executor or administrator frequently feels pressure to wrap things up as quickly as possible. Also, even if you qualify for a probate bond, getting one often takes some time. Again, compare it to taking out a loan.
For all the reasons listed above, most attorney-drafted wills waive the requirement of a bond. If the will states that there is no bond required, and the named executor is the one submitting the will to probate, there will be no bond required. But what if a) there is no will; b) the named executor is not the one probating the will; or c) the will does not waive bond? Then whether or not you will be required to post a bond depends on three things:
- the agreement of all of the heirs,
- the existence of debts,
- and the Judge you are in front of.
If all of the heirs agree to waive the bond, and there are no unsecured debts of the estate, the Court will agree to waive the bond. If all of the heirs are in agreement, and there are unsecured debts of the estate, I have never had a Harris County Judge order a bond, and I have never had a Montgomery County Judge not order a bond.
I recently debated the issue of the bond with Judge Winfree, of Montgomery County (now retired) at great length, and he succeeded in convincing me that the legislature assumed there would be a bond required anytime there were debts, but he did not succeed in convincing me that it is a requirement of the Probate Code. But he doesn’t have to convince me, I have to convince him, and I, like every other probate attorney practicing in Montgomery county, failed to convince him. He did agree that if the creditors would waive the bond, then he would as well. I got the agreement of the creditors and, in a very minute way, made a bit of history by securing the very first waiver of an administrator’s bond in Montgomery county where the estate has substancial unsecured debts.
If you don’t have the agreement of all the heirs, and the will does not waive a bond, or the named executor is not the one probating the will, any judge will require a bond. The amount o the bond is based on either the value of the esate, or if the heris are in agreement, the amount of unsecured debt.