In most adult conservatorship estates and in many deceased probate estates, the court will impose a probate bond requirement. No, this is not the 007 type of bond.


Rather, a bond is a guarantee of payment if another party fails to perform a certain obligation.

The following are examples of situations in which the court may require a bond.
• Qualify as Conservator
• Qualify as Personal Representative
• Sale of Real Estate
• Qualify as Trustee of Registered Trust

There are two types of bonds, personal and surety.  A personal bond is a guarantee or promise of performance without any form of security.  That means that if a personal bond is required by the court, a signature alone will create the guarantee of performance without the necessity of having a bond company.

A surety bond is a guarantee or promise of performance with a third party as security.  Generally, a surety bonding company (often an insurance company) must be used to guarantee to make good on any losses that may occur in the fiduciary’s performance (such as theft or poor management of assets).  A fiduciary can deposit collateral to satisfy the bonding requirement without the need to use a corporate surety company.  However, this method is often impractical because of the size of the bond.

If a personal representative, trustee, or conservator (called fiduciaries) fail to perform a duty properly, the court may order a surety to perform an act that they should have performed.  Most often, the court may order the surety to reimburse the estate for any losses that occurred as a result of embezzlement or mismanagement by the fiduciary.

The reason the court imposes a bond requirement is to ensure that the estate is protected against the acts of the fiduciary. In a probate estate, most persons with an interest in the estate (in excess of $2,500.00) or a creditor having a claim against the estate in excess of $2,500.00 may make a written demand that a personal representative obtain a bond (MCL 700.3605).

In a conservatorship, the conservator is required to file a bond in certain situations. The court generally requires a bond equal to the value of cash and property that is readily convertible into cash plus one year’s income of the person under protection.  In a conservatorship, there are certain situations in which a bond is not required. (MCL 700.5410).

The cost of obtaining a probate bond from a surety company is called a premium.  After qualifying, a premium must be paid to the bonding company before the bond will be issued.  The surety bond premiums are a cost of administration and generally may be paid from the estate assets.

Often, it is difficult for a fiduciary to qualify.  To qualify,generally the applicant must be employed, have a competent attorney, and have a good credit score.  If a person is unable to qualify for a surety bond, an option is to request that the court restrict the letters of authority so that the assets are protected in a bank account and cannot be removed with a first obtaining a court order.  Another strategy when a person cannot qualify, is to request the appointment of a co-fiduciary that otherwise would qualify for a bond.

The Probate Pro can assist in administering the estate and qualifying for a bond.

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