One of the most important steps in creating an estate plan in Georgia is to name an executor. The executor of an estate is responsible for finalizing a person’s estate when they die. That includes inventorying the person’s assets and debts, valuing the assets, providing notices to the decedent’s creditors and settling creditor claims with estate funds. The value remaining in the estate after debts are paid is then divided and distributed by the executor among the heirs of the decedent. In some cases, the executor will be required to secure a probate bond as part of the process.
Purpose of a probate bond
A probate bond is meant to ensure that the executor does not violate the law in administering the estate of the decedent. It is a kind of surety bond, like an insurance policy, the price and value of which depends on the size of the estate. The heirs can file claims against the bond and the bond will pay out if the claim is found to be valid.
Probate bond operation
Once the probate bond has been purchased, the executor can administer the estate. If any interested party, e.g. a family member of the decedent or a person named in the estate planning documents, believes the executor has breached his fiduciary duty, the party can make a claim against the bond. Breaches of the executor’s fiduciary duty include using assets for their own benefit, unjustly favoring a beneficiary, breaking the law or acting against the will.
Duration of a probate bond
In most cases, probate bonds are effective for a predetermined period of time, typically between one year and two years. The period of the bond depends on the complexity and value of the estate. The estate will usually be settled before the bond expires. Probate bonds can be a good way to protect heirs and incentivize the executor of the estate.