When a California resident dies, the individual they named in their last will and testament to act as their estate’s personal representative will have a lot of important tasks to perform. They will be tasked with settling the estate’s debts, paying its outstanding taxes and ensuring that its assets are distributed in accordance with the decedent’s wishes. If they fail to carry out these duties in a competent fashion, the estate’s creditors and beneficiaries may receive less than they should. This is why personal representatives in California are usually required to purchase probate bonds.
A probate bond is a type of surety bond that reassures interested parties that a personal representative will follow state laws and respect the wishes of the decedent. If they do not, a creditor or heir can seek financial compensation by filing a claim with the surety that issued the bond. If the surety determines that claimant suffered financial losses because the personal representative mismanaged the estate, compensation is paid.
Probate bonds in California
In California, courts set probate bond amounts based on the size of the estate. When personal representatives think the amount is too high, they can request bond reductions. The requirement to purchase a bond may be waived if all of the beneficiaries agree, but a probate judge may order the personal representative to purchase a bond anyway if the estate is complex or has outstanding debts.
Bonds protect beneficiaries and creditors
Probate bonds ensure beneficiaries and creditors do not suffer financial harm when estates are mismanaged, and personal representatives are usually required to purchase them. If an estate has few assets, no outstanding debts and all of the beneficiaries agree, the requirement to purchase a probate bond may be waived.