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Does your executor need to be bonded in California?

On Behalf of | Dec 8, 2023 | Estate Administration |

Your executor or “personal representative” is the person you name to make sure that your estate is properly handled. Assuming that there are no problems with their appointment, that’s the person the court will ultimately authorize to secure all your assets, pay your final debts and make sure that your beneficiaries are given their inheritances.

While each state is different, California generally requires your personal representative to be bonded. The only exceptions are when the testator’s will expressly waives the requirement (and the court permits this to happen) or all the beneficiaries will agree in writing to waive the bond requirement.

Here’s why waiving the bond may not be a good idea

An executor bond is a type of surety bond that’s put in place to make sure that a fiduciary – someone entrusted to manage assets and money on behalf of others – honors their commitment and upholds their duty. It’s also designed to protect an estate’s beneficiaries from losses.

Surety bonds typically cost .5% to 1% of the value of the estate and are paid for by funds from the estate, so there’s no financial burden on the executor. If they defraud the estate or make mistakes that devalue the estate’s assets, the insurance company that underwrites the bond will cover the beneficiary’s losses. The personal representative would then be responsible for reimbursing the surety company.

Whether you’re a testator who is in the process of creating your estate plans, a beneficiary who has been asked to waive the personal representative’s bond requirement or a personal representative who just needs more information, seeking legal guidance can help if you have additional questions or concerns.