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By: Scott Grossman on November 12th, 2018

Bond: Everything you need to know

This isn’t to stop you from calling the office with questions and this is not a way of telling you that we don’t want to hear from you. As our client, if you’ve got a question by all means let us know this is just an additional resource for you. So today what I’m going to talk about is bond, some of our clients have to post, some of our clients don’t. I’m going to discuss why these two different things happen and for those who have to post bond, I’m going to explain the process and what it is you’re looking at. To demystify some of this for you, anybody who has filed for probate where the will specifically waive bond, the executor does not have to post the bond and you could probably just skip the rest of the video unless you’re terribly interested in the topic.

If you are an administrator, meaning you’ve started the probate process and there is no bond, but we’ve got everybody who could inherit to sign a bond waiver you’re not going to have to post bond and if you don’t want to watch anymore you don’t have to. Now the one exception to this rule is if you’re an executor or an administrator with a bond waiver and you live out of state meaning you live outside of California. 

If you live outside of California even though you’ve got the waiver you’re still gonna have to post a  minimum bond and what the amount of that minimum bond is is going to vary from one County to the next because frankly throughout the state different counties set it differently.

The lowest amount I’ve seen at the time that we’re recording this video is ten thousand most of the counties are setting it at either twenty or thirty thousand dollars as a practical matter as far as the cost of the bond there really isn’t going to be a difference in the costs. So if you hear you have to post a minimum bond just understand you’re gonna have to go through the application process. I’m very frequently asked what is a bond I don’t even know what it is I’m dealing with? Perfectly fair question.

A bond is just an insurance policy. The bond company is just a big insurer that’s all that it is and what they’re doing is they are actually insuring the estate for the benefit of each heir or beneficiary.

Now what that means is they are insuring against your misconduct, that’s really what it comes down to. If you steal money from the estate if you do something where you breach your fiduciary duties and it causes a loss to the estate unsurprisingly the people who are going to inherit, want to be made whole that’s the purpose of posting the bond. It ensures against any sort of theft or breach of fiduciary duty by you that causes loss to the estate. So when you’re posting bond you’re getting a third party to make everybody whole. If you run into this kind of problem to post the bond you’re going to be sent a bond application. Now we tell all of our clients the same thing which is if you have a company that you want to work with by all means work with them we don’t care who it is that post the bond. Very, few of our clients come to us and tell us that they have a company and if that’s the case for you just let us know we’ll recommend a company to you.

We’ll get the application, we’ll have it sent out to you and when you get that application it’s going to look a lot like a credit application to you and there’s a good reason for that.

The reason is all these companies have found the same thing which is pretty universally the more creditworthy a person is the less likely it is that they’re ever going to have to pay out on that bond. So when it’s asking you about things like your work history and the assets that you have this isn’t to be deliberately invasive. This is for the company to assess the risk they’re taking on because the price of your bond at least in part is going to depend upon how creditworthy you are so when you go through that application do your best to fill everything out. When I say do your best that doesn’t mean you get to skip sections if they’re either in convene or they don’t make sense to you. The application has to be filled out in its entirety, they’re not going to process it without it but if you come across a part of the application that you’re confused by or it doesn’t make sense to you by all means contact us let us know we’ll explain what information is being sought. When you have completed the application we’re gonna send that to the company, the bond company will then get back to us and they will tell us first of all whether they’re willing to write the bond.

As you might expect we have worked with some companies for a lot of years now given them a lot of business through our clients and they will bend over backward even for clients who do have credit problems to make sure there is some way that they can issue a bond.

They will also let us know what the cost of the bond is and this is something that I have gotten many phone calls over the years from panic clients “oh my god I can’t believe I have to pay for the bond” well you don’t have to pay for the bond. The estate has to pay for the bond so whether the bond is two hundred dollars or two thousand dollars this isn’t money that’s going to come out of your pocket personally. This is money that once you’re appointed either as the executor or the administrator you’re going to use money from the estate to pay the cost of the bond now that bond fee is an annual premium. That matters because it should give you some idea that you want to at least try if it’s possible to wrap up the estate within a year. After all, if you go into a second year a second bond premium will have to be paid.

Now the reason why some probates take longer than others is a separate discussion from talking about bonds. Today I just want to make you aware that you don’t want to dawdle during the estate process if you can avoid doing that to the best of your ability. Keep it moving forward so you only pay the bond premium once. When the bond has been issued we’re physically going to get the bond document we’re going to send it to you because you have to sign it, you’re going to send it back to us, we’re going to get the signature of the of an executive with the bond company, and we’re gonna be responsible for submitting that to the probate court. If the court has imposed a bond you need to understand this is mission-critical.

Without that bond, your letters are not going to issue, your letters as a reminder and I know that we’ve talked about this before, your letters of the document from the court that tells the world at large that you’re now the personal representative of the probate estate.

That means you’re the legal representative, you are the person who has the ability to act on behalf of the probate estate and your letters, whether they’re letters testamentary because you’ve got a will or they’re letters of administration because there is no will or critical you will need them to do. Quite a few things during the course of probate so address the bond as efficiently as you’re able to if you have questions about any part of the application let us know so we can help you but remember you’ve got to do your best to fill this out as completely as possible so that we can Shepherd through this thing and get your bond issued.


If you are ready to start your case, then please give us a call or fill out our Get Help Now form. A comprehensive overview of California Probate is available here. Should you have additional questions about trust litigation, you will find plenty of useful information in our Learning Center.