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Probate bonds are legal protection afforded to the estate’s beneficiaries, heirs, and creditors, offering financial security from a breach of fiduciary or trusted duties by the estate’s administrator, executor, guardian, or conservator. You can learn how these may apply to your situation by speaking with an experienced Denver probate lawyer at Colorado Estate Matters, who can answer the question of what is a probate bond and provide you with the confidence that an estate or the estate is appropriately administered and protected.
We offer representation for personal representatives, beneficiaries, or the estate of a loved one. Colorado Estate Matters can assist with any concerns during probate and provide court representation if necessary.
A probate bond ensures the fiduciary or trustee of a will or estate will conduct business according to Colorado law and the conditions of the will or trust. A probate bond also protects a fiduciary (§15-1-103(2)) against accusations of mismanagement. Probate bonds may also be referenced as executor bonds. The estate’s fiduciary will apply for the bond with a surety company and undergo a credit check before approval. A surety company may reject an application of a fiduciary or request more collateral before issuing a probate bond to someone with a poor credit rating.
Consider this example: Jane is named the fiduciary of her sister’s estate valued at around $1 million. Jane enjoys online shopping, incurring excessive credit card debt while failing to meet her minimal credit card payments. Jane decides no one will miss the $75,000 she needs to pay off her credit card debt. The surety company’s role is to protect the beneficiaries against Jane’s malfeasance or wrongdoing. However, the surety company would likely reject Jane’s application due to a poor credit rating.
Purchasing a probate bond is generally the responsibility of the individual acting in a fiduciary capacity. Calculating the cost of a probate bond will depend on the coverage necessary to insure the total amount of the estate. The fiduciary will file a statement under oath stating their best estimate of the estate’s total value (§15-12-604).
The cost of a probate bond will likely reflect a percentage of the estate’s value. A registrar may dismiss the requirement of a probate bond if the fiduciary possesses assets equal to the cost of the probate bond and secures them with a financial institution.
A probate bond will generally last throughout the administration of the deceased’s will, or specific terms may be defined when a probate bond ends. A probate bond secured by a guardian or conservator of a minor or incapacitated individual’s (§15-14-102(5)) estate may last until a minor reaches the age of majority in Colorado. A conservator or guardian of an incapacitated adult may require a probate bond until the death of an incapacitated adult.
There are a few reasons a Colorado court may require a probate bond:
A will may state that it relieves a personal representative of a probate bond. It is up to the court’s discretion to provide this relief or to require a probate bond.
Contact Colorado Estate Matters if you have questions about securing or requesting a probate bond. A Denver probate attorney will offer the guidance you need in estate proceedings. Please call (303) 713-9147 or contact us online to schedule a consultation.