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In a lot of movies, we often see grieving families gather together to observe the reading of the deceased’s will, after which, everyone receives their inheritance without a lot of fuss. The reality concerning the distribution of assets (also known as probate), though, is far more complex. An executor must be named to oversee the collection, assessment and appraisal of all assets, as well as the forgiveness of debts and other financial matters. What most people may not know is that this executor may also be required to post a probate bond prior to executing his or her duties. Why? What is a Probate Bond? Also known as a fiduciary, executor or estate bond, a probate bond guarantees that the appointed executor complies with all mandated state laws and will ethically fulfill his or her duties. If the executor does not faithfully execute the will, claims can be made against the bond, allowing the defrauded to be compensated for their full inheritance. Do I need to post a bond? Not always. Bonds apply when a will is drafted and includes a requirement. However, the executor may seek to waive the bond by collecting signed written waivers from all of the beneficiaries and providing the court a written declaration that details the solvency of the estate as well as all of its creditor, tax and other contingent liabilities. Bonds also apply to intestate probate (in other words, probate wherein a will was not drafted). In most cases, the court will require a personal representative or administrator to post bond unless all beneficiaries waive the requirement. In either case, the court has complete discretion to require an executor or intestate probate representative to post bond in an amount up to the maximum estimated value of the estate. How do I post a bond? The executor will be required to fill out an extensive financial application from an insurance broker, surety agent, or bonding company. This application will then be provided to the court along with the will, detailed estate information, disputes among heirs, court bond orders, and the amount of the bond. Because bond issuers are acting as loan agents within the process, there are very high restrictions placed on these applications, and may be denied if the executor has very little assets or a poor credit history. In any case, it can be very difficult and costly to navigate the process of probate court, especially as an executor, so it’s always best to consult an attorney before diving head first into the murky waters of probate.

It may not seem like it, but there are a lot of things to consider when dealing with a loved one’s death beyond funeral arrangements. One must be prepared to notify heirs and/or beneficiaries, safeguard and distribute the decedent’s assets, pay off any outstanding obligations, and manage the liquidation of investment portfolios, retirement funds and bank accounts. Anyone can choose to tackle these tasks, but this can place an unwanted burden on the party in question. That is why hiring a fiduciary —a professional, independent third party who holds an ethical and/or legal responsibility of trust — to act on your behalf is always recommended. Though a fiduciary (also known as a Professional Trustee or Professional Estate Administrator) can be appointed by the courts, it’s always best to consider whether you want to hire a professional fiduciary prior to someone’s passing, which can make the probate process much easier and smoother than waiting until the last minute. A professional fiduciary: Must be licensed and insured. Professional fiduciaries must obtain a license from the state they’re practicing in as well as maintain an insurance policy to prevent losses in the case of negligence. This is not true for a family member. Is held to fully regulated fiduciary standards. Professional fiduciaries must ensure the decedent’s finances and estate are secure, protected and confidential, and adhere to strict policies that prevent the misappropriation of funds. A family member does not have to follow these standards. Obligated to maintain trust and loyalty. People tend to hold grudges, so when an argument occurs between beneficiaries, or it’s determined that fiduciary responsibilities would be better handled by someone else, this may lead to jealousy or resentment. A professional fiduciary does not allow this type of personal circumstance to affect their fiduciary responsibilities. Have a working knowledge of state and federal laws. Not just anyone knows the ins-and-outs of speaking with attorneys, accountants and other professionals one may have to deal with during the probate process. Professionals fiduciaries understand how to cultivate these financial and legal processes. Must not profit from their position. Using the fiduciary position for the purposes of financial improvement, including taking a loan against the beneficiary’s finances, is something a professional fiduciary is forbidden to do. This isn’t the case for a family member who may only agree to these responsibilities from a place of greed. Help avoid fights over the management of the estate. Arguments over the estate may arise between beneficiaries and be difficult to resolve. Because a professional fiduciary is unattached from the estate, they are better able to limit any type of infighting that may arise. Saves you time. Most people who might take on this position already have plenty of obligations, including work and family, that take precedence over their duties as a fiduciary, whereas a professional is always focused on these duties.