Say someone who owns individually-titled assets with no beneficiary designation passes away. Whether they have a Will or not, the deceased person’s estate has to go through probate. In some cases, a probate bond is required by a Probate Court in CT.

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. Just in case the fiduciary does not perform their duties 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 in CT 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 in the Will, 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?

There is only one instance where you would receive money back for a probate bond. 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 Probate court in CT generally sets the coverage based on the total value of the estate. This includes any real estate that the fiduciary has to oversee.

The bond’s cost is a percentage of the value of the estate — usually around 0.5%. Essentially $500 for every $100,000 of estate assets.

How Does a Probate Bond Work?

When 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 they can resolve it.

If the representative does not resolve the claim, the surety company will step in and pay up.[/vc_column_text][/vc_column][/vc_row]

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. This is why probate courts in CT require probate bonds in some cases.

When Is a Probate Bond Required For a Conservatorship?

A conservator of the estate is a person appointed by the probate court to manage the finances of an incapacitated person.

Since the conservator has control of the conserved person’s finances, the court will generally require a probate bond. The bond is, in effect, an insurance policy that protects the conserved person’s assets. The bond ensures the proper performance of the conservator.

Typically, the amount of the bond will be equal to the value of the liquid assets under the conservator’s control. That amount may be reduced by the amount of assets placed in restricted accounts. But ultimately, it will be determined by the Probate court in CT.

The court may excuse the requirement of a probate bond if any of the following apply:

The value of the assets is less than $20,000, or the amount of the unrestricted assets is less than $10,000.
In a voluntary conservatorship, the petitioner waives the requirement of a probate bond.
In an involuntary conservatorship, the respondent or conserved person executed an advance designation of a conservator. The requirement of a probate bond was excused.

Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only.

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