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Probate Bonds
When someone passes, his or her property must be distributed through probate. The process is generally overseen by an executor, if there is a will, or by a court (and a court appointed personal representative) if there is no will. An executor is the person designated to administer the estate - this person is also known as the personal representative. Most jurisdictions require that the executor post a bond to protect the assets of the estate.
Probate involves identifying and inventorying the deceased person's property, accounting and appraising the property, and then paying taxes and creditors with the deceased's assets.
If there is a will, the assets are distributed according to the instructions of the will. If not, then state law determines who gets what and how much.
Having a will, alone, does not mean probate is unnecessary. Although a will might make the process simpler, probate is still required for assets in the deceased's name alone.
In general, property which the deceased owned individually has to pass through probate for ownership to pass to his or her heirs. Jointly owned property and the proceeds of life insurance, retirement accounts, and annuities pass to the surviving joint owner or the named beneficiaries without the necessity of probate.
Probate bonds pertain to a very specific aspect of a party's legal responsibilities in financially related circumstances. Just as construction companies, auto dealers, and other individuals or organizations are bound by lawful, responsible business practices, so too are those in certain areas of the legal profession.
One of the most common types of probate bonds falls under the category of what is called the fiduciary bond. This pertains to the legal settlement of monetary affairs when an executor is named to take responsibility for an individual's property and money.
There are several situations where the mishandling of such a matter can cost people quite a bit. What if a home is not properly appraised? What if there are sources of money that are overlooked? This is why a fiduciary must have probate bonds. If some kind of mismanagement occurs, the surety company issuing the bond will take financial responsibility.
Often, fiduciaries, executors, and trustees are required to be bonded before they will be entrusted with the task of taking care of a person's affairs in the event of their death or incarceration. This ensures that the fiduciary handling the probate matter will be as thorough as possible. It also means that they can be trusted to not engage in dishonest legal practices. This is why it so important to name a bonded executor to handle one's final business.
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