How Probate Bonds are Used in Estate Planning
What is a Probate Bond?
A probate bond is a type of surety bond that ensures a fiduciary will fulfill the duties required of them as an appointed official. Also known as fiduciary bonds, executor bonds or estate bonds, probate bonds provide insurance to the beneficiaries of an estate and can protect them in the event that a fiduciary does not properly fulfill the duties they have been assigned.
What Exactly is Probate?
Probate is the legal process of the state that governs how a deceased person’s assets can be distributed. Normally, this is determined by a person’s will, trust or the estate they have set up. If none are present upon a person’s death, their assets are distributed to the court based on the probate laws and process of the state.
The probate process generally includes assembling the deceased person’s assets, paying off their debts, funeral costs and any owed taxes, and distributing their property to beneficiaries.
What is a Fiduciary?
A fiduciary is a person who has been assigned to oversee the distribution of assets of a person after their death. They are charged with executing the terms of a person’s estate or will as they are written. Learn more about the duties of a fiduciary.
Some examples of fiduciaries include:
- Personal representative
- Representative payees
How Does a Probate Bond Work
When a person is appointed as the fiduciary of an estate, they are generally required by the court to obtain a probate bond. Probate bonds provide insurance for the beneficiaries of a will or estate in the event that the fiduciary does not fulfill his or her duties properly. A claim can be made against a bond if the estate is mismanaged. A claim cannot be made on a probate bond because a person contests the terms of a will or an estate. Probate bonds are only there to ensure that the terms of the will or estate are carried out by the fiduciary.
People in Minnesota can require a bond from a personal representative or trustee in their will or estate planning process. The court can also require one via court order, as well. Work with your attorney to determine if this is necessary to include in your will or estate.
Obtain a Probate Bond in Minnesota
If you have been appointed to act as a fiduciary of an estate, you will likely be required to obtain a probate bond. If you need a probate bond in Minnesota, contact the surety experts at The Patrick J. Thomas Agency today.