If any of you have had the pleasure of even slightly rubbing shoulders with the legal sphere, you may have noticed that judges love bonds, and that bonds seem to be everywhere in all kinds of legal issues. If you are unlucky or rambunctious enough to get the the cuffs slapped on you, you may know all about a criminal bond, or getting “bonded” out. If you’ve been appointed guardian looking after a millionaire who recently had some mental issues, you may also find yourself with a bond.
In our practice, we see bonds most often in the administration of estates and probate. A bond is simply property held outstanding to make sure one party does (or doesn’t) do something.
In the administration of estates, a bond is essentially valuables given up by the administrator or executor to protect the property in the estate from any malfeasance or chicanery (note to self: use “chicanery” more often).
So, as executor, you give up a bunch of money (or land, or motorcycles, ect) to the judge that he holds for you until you’re done disbursing everything to the beneficiaries and paying creditors. If you mess up and pocket estate assets (as history shows, an all to powerful temptation for some), then the judge keeps the bond in the amount lost to cover those same beneficiaries or creditors.
Why is bond expensive? Well, it’s designed to cover the assets of the estate. While not all estates have a lot of assets, when you start throwing in paid off houses and life savings, it can add up quickly.
This is where professional sureties come in. Most people don’t have enough assets liquid to put up bond, so a professional bonding company will do it, (think a more august version of the bondsman you see outside the courthouse near all the defense attorney signs). They will front the money, for a small fee of course.
A lot of people could stand to avoid all this bond business, and you can, real simple like, with a will. Make sure you appoint your executor to serve without bond, and that should avoid that little problem. Of course if you don’t trust your relatives, a bond might not be so bad.
More on bonds in a later post.
Zane Frisbie is a partner at Regan & Frisbie, PLLC. Located in Plano, right in the nexus of Collin County.
Questions or concerns…give is a call at 469-200-4737