Probate Bonds Help Protect You as the Beneficiary in New York

Also called a fiduciary bond, this is a type of bond that an executor takes out so that the heir is protected from misappropriating funds meant for beneficiaries.

In this case, Martin was supposed to take out a probate bond to make sure Tony doesn’t suffer at all due to the misappropriation of funds.

With this said, let us look at the different players in the probate bond:

• The executor – this is the person that your parent has assigned to distribute the assets. While they are supposed to be trusted, many end up making mistakes while they are administering the estate.
• Beneficiaries – these are the people that stand to benefit from the estate. When the executor acquires a probate bond, the beneficiary doesn’t have to worry because why will eventually get a share of their estate no matter what happens.
• Creditors – the bond also shields the creditors from losses. When the executor takes out this bond, they are sure that even if the executor doesn’t clear the debts, the bond company will do it.

In this situation, if Martin would have taken out the bond before starting the administration of the estate, then even if he would have sold the car, Tony would have been paid by the bonds company.

Before we look at the cost of the bonds, let us first look at the types so that we understand the choices that you have.

Guardianship Bonds

When you die and leave behind kids without a surviving spouse, you need to appoint a guardian to make sure that when the kids get to 18 years, they receive their due share.

However, due to the mistakes that guardians have made over the past, the need for a bond became a priority. A guardian has to get a probate bond so that he avoids these mistakes. When the time comes, the guardian will distribute the assets equitably among the beneficiaries.

These bonds aren’t only applicable to kids, but to the guardians for people with special needs and elderly.

Testamentary Bond

At times, you might come up with a trust to distribute your estate the right way when you die. However, there have been instances when a living trust has been misused by the trustee, which has made it viable to have a bond to protect the estate in the trust.

The trustee is supposed to follow the instructions that you have set out in the document. The role of the bond is to protect against a trustee that doesn’t follow the rules indicated in the trust document.

Executor Bond

An executor can easily misappropriate the assets in the estate if you aren’t careful. The executor is supposed to manage the affairs of the deceased, but if this isn’t the case, then a bond protects the beneficiaries.

You need a team that understands the need for probate bonds and advises you on the best way forward. With a team of probate lawyers at your disposal, Trust and Estates recommend the best company to give you probate bonds, and see to it that you get what you deserve.

The cost varies widely according to the level of coverage that the estate needs. The primary determinant is the value of the estate that the fiduciary has to manage.

Typically, the bond company charges premiums are 0.5 percent of the estate, which means if you are managing an estate valued at $200,000, you get to pay $1000 in premiums.

When you look at many wills, the testator waives the need for a bond. However, legally, you can avoid a bond if the beneficiary agrees to a waiver or if the judge allows for a petition to waive the bond.

Your probate lawyer advises you on the best place to get a bond, and how to handle it in court. Call us today for professional help.