Probate is a legal process that takes place after a person’s death, with the purpose of distributing their belongings and assets among heirs and beneficiaries. This process occurs when a person dies without having a valid will in place.
The assets distributed through probate can encompass real property, such as land or a house, as well as personal property and non-physical assets like bank accounts. Each state has specific probate procedures that dictate how a person’s belongings and assets are distributed in the absence of a valid will.
The probate process is often considered unfavorable due to the potential for undesirable distribution outcomes. Additionally, the probate process can be time-consuming, complicated, and in some instances, a portion of the estate may escheat.
Escheatment is the process through which a person’s property reverts to the government when no rightful heirs or claimants can inherit or claim the property. Escheated property typically becomes the property of the state’s government.
During probate, the court may appoint an executor or administrator to help distribute the deceased’s property. This executor may be required to post a probate bond with the court, ensuring that they fulfill their responsibilities in accordance with the state’s probate and estate laws.
These duties may include properly identifying the estate property to be distributed, naming potential beneficiaries, and handling any outstanding property debt. In essence, a probate bond serves to protect the estate’s property from any misconduct by the executor, such as attempting to claim the decedent’s property for themselves.
Are There Different Types of Probate Bonds? What Protection Does a Probate Bond Offer?
Probate bonds can be referred to by different names, depending on the specific situation and the party required to provide the bond. For example, if the estate involves a guardian, the probate bond may be called a guardian bond.
Other types of bonds include conservator bonds, trustee bonds, administrator bonds, and more.
A conservator bond is required when a court appoints a conservator to manage the financial affairs of a person who is unable to do so themselves. The bond protects the individual from any financial harm or mismanagement caused by the conservator.
A trustee bond is a bond required when a trustee is appointed to manage a trust. The bond ensures that the trustee will manage the trust assets in accordance with the terms of the trust and will not engage in any misconduct that could harm the beneficiaries of the trust.
An administrator bond is required when an individual is appointed as the administrator of an estate that does not have a will. The bond protects the estate from any financial harm that may be caused by the administrator’s negligence or misconduct.
Other types of bonds that may be required in fiduciary relationships include guardian bonds, custodian bonds, and receiver bonds. A guardian bond is required when a court appoints a guardian to manage the affairs of a minor or an incapacitated adult.
A custodian bond is required when an individual is appointed to manage the assets of a minor. A receiver bond is required when a receiver is appointed to manage the assets of a business in financial distress.
A probate bond’s primary function is to protect the legitimate heirs and beneficiaries of an estate. It ensures that the rightful parties receive their appropriate distribution. In most jurisdictions, priority is given to the decedent’s spouse and living children when it comes to estate distributions.
If other parties attempt to claim a distribution before the decedent’s spouse and children, the executor may intervene and mediate the situation. Consequently, the probate bond incentivizes the executor to ensure the probate process proceeds as intended.
Probate bonds offer protection to the estate’s beneficiaries against potential fraud, errors, negligence, theft, and misrepresentation by the executor.
What Happens When an Executor Fails to Fulfill Their Responsibilities?
An executor is appointed to ensure that the decedent’s wishes are carried out. In cases where there is no evidence of the decedent’s intentions, such as when no valid will is present, and the estate is subject to state probate laws, the executor must determine the decedent’s likely wishes.
The executor’s primary responsibilities include paying off any estate taxes and debts and distributing the remaining assets to the appropriate beneficiaries.
If the estate undergoes probate, additional executor duties may involve:
- Hiring a probate attorney to represent the estate.
- Contacting relevant parties.
- Managing specific tasks related to the probate process.
When serving as the executor of an estate, conflicts of interest with beneficiaries may arise, including:
Attempting to Purchase Estate Property
Let’s say that the deceased person’s estate includes a valuable piece of real estate, and the executor is also a real estate developer. The executor might be tempted to buy the property from the estate at a lower price than it’s worth and then develop it for their own profit.
Failing to Provide a Proper Accounting of the Estate
The executor has a duty to keep accurate records of all of the estate’s assets and debts and to distribute those assets to the beneficiaries in accordance with the deceased person’s will or state law.
If the executor fails to do so, the beneficiaries could suffer financial harm.
For example, the executor might fail to disclose a bank account or investment account that belongs to the estate or might distribute assets to some beneficiaries but not others.
Having a Personal Interest in Obtaining Estate Assets as a Beneficiary
Let’s say that the executor is also one of the beneficiaries of the estate, and they stand to inherit a significant amount of money or property. The executor might be tempted to prioritize their own interests over those of the other beneficiaries by undervaluing certain assets or distributing them unfairly.
Alternatively, the executor might take a larger fee for themselves than is reasonable or customary, reducing the number of assets available for distribution to the other beneficiaries.
If the executor breaches their duties, the affected beneficiaries can file a civil suit against them, resulting in damages to reimburse the heirs for their losses. In severe cases, criminal charges may be brought against the executor, such as for fraudulent misrepresentation, which could result in fines or imprisonment.
Requiring a probate bond is often part of the probate process to mitigate these risks.
Do I Need an Attorney for Probate Bonds?
A probate attorney can assist in setting up and enforcing the bond, as well as seeking a waiver of the bond if appropriate. If issues arise during the probate process, an attorney can represent the estate in court.
LegalMatch is an online platform that can help you connect with experienced probate attorneys who can assist you with issues related to probate bonds.
By filling out a brief online questionnaire on the LegalMatch website, you can be matched with probate attorneys in your area who have experience in the specific area of law you need assistance with. This can save you time and effort in finding an attorney who can help you with your particular legal issue.
Once you receive a list of matches, you can review each attorney’s profile and read reviews from past clients to help you make an informed decision about which attorney to hire. You can then schedule a consultation with the attorney of your choice to discuss your legal needs and determine the best course of action for your situation.
Use LegalMatch as a resource for finding a skilled probate attorney who can help you with probate bonds, as well as other legal issues related to estate planning and administration.
