When someone who owns individually-titled assets with no beneficiary designation passes away, with or without a will, the deceased person’s estate has to go through probate.

The fiduciary (called an executor if there is a will, and an administrator if there is not) is in charge of paying off creditors and distributing the inheritance to beneficiaries, all under probate court jurisdiction. In some cases, a probate bond is required.

A probate bond is an insurance policy to protect the estate of the decedent. Unlike insurance, however, the probate bond is not a “get out of jail free card”, the bondholder is still responsible for any expenses or payouts pertaining to the estate.

The main purpose of a probate bond is to protect beneficiaries and creditors from negligence, in case she does not perform her duties as executor honestly and in good faith.

Who Needs a Probate Bond?

If a probate bond is required, it is the fiduciary who is required to purchase it. But it is the estate funds that pay for it.

The probate court decides whether a probate bond is required, and it will generally require a bond unless:

• A valid Will specifically waives the bond requirement, or
• If there is no such waiver, all heirs have signed a bond waiver

One would assume, that when a testator (the person who drafts the will) includes a bond waiver provision, they’re doing so because they trust the person they’ve chosen as the executor of their estate.

Similarly, if all heirs agree that the intended representative does not require a bond, the court assumes they have reason to trust that individual.

However, even if the will includes a bond waiver, the court still has the discretion to enforce that a probate bond is purchased.

Probate courts are more likely to take such an action if the estate has a large amount of unsecured debt. By doing so, they are protecting potential creditors of the estate.

When and How Do You Get a Probate Bond?

The Fiduciary can purchase a probate bond from a surety company. The attorney assisting with the probate matter can assist in finding a company that issues probate bonds and completing the necessary paperwork.

As the bond is required before the individual is appointed by the probate court, the fiduciary may have to purchase the bond out of his own funds.

However, a probate bond is a legitimate estate expense, so the fiduciary can use estate funds to reimburse himself once the estate is opened.

Is a Probate Bond Refundable?

The only instance where you would receive money back for a probate bond is if you renew your bond, and then the bond is exonerated mid-term. In this case, The Estate might be entitled to a pro-rated refund for the money paid for the current bond term.

For example, let’s say you purchased a court bond for $500, and each year you had to renew it for an additional $500 to keep it active.

So if the bond was renewed in January, and then exonerated in March, you might be eligible to get back a portion of the $500 you paid for the renewal. If you are looking for a pro-rated refund, speak to the surety company that issued your bond.

How Much Does a Probate Bond Cost in Connecticut?

The cost of a probate bond can depend on the amount of coverage that is required. The court generally sets the coverage based on the total value of the estate, including any real estate, that the fiduciary has to oversee.

The probate bond cost is a percentage of the value of the estate — usually around 0.5%. which is equal to $500 for every $100,000 of estate assets.

How Does a Probate Bond Work?

If someone makes a claim against the bond, the surety company investigates to determine whether the claim is valid. If they find that the claim is valid, the surety company then notifies the estate’s representative of the claim so that he or she can resolve it.

If the representative does not resolve the claim, the surety company will step in and pay up.

However, the purpose of the probate bond is to protect the estate and its heirs and creditors, not the person who purchased the bond.

So If the surety company has to step in to resolve the claim, they will require reimbursement in full (plus legal expenses) from the bondholder.

What If There Is No Probate Bond?

Imagine for a moment that you are one of the beneficiaries of your favorite uncle’s estate. He left behind a beautiful home, thousands of dollars in bank accounts, a boat, and a teacup collection (no judgment here).

You then find out that his third wife who stands to only inherit the teacup collection got appointed as the executrix of his estate.

Carrying major hard feelings about the inheritance, she takes all the money out of the bank accounts and sails away on the boat to Monaco, leaving the teacup collection behind.

Are you out of luck?

The unfortunate truth is that you might not get your money. You could (and probably should) make a claim against her in civil court, but if she has no money to pay (and perhaps can’t be found), you may not be able to recover your full inheritance.

Of course, the good news is that most executors and administrators take their fiduciary duties very seriously. But if it does happen, courts want heirs and creditors to be protected, which is why they require probate bonds.