Many Texas residents and those with relatives who pass away in Texas may, unfortunately, end up in probate disputes. If there is a possibility of an estate dispute under Texas law, the Court may require the estate representative to secure a bond. In the event that the parties dispute the estate, the bond functions as insurance for the estate’s value. This blog post is an informal explanation.
When people usually think of bonds in court cases, they think of someone making an unfortunate call from the jailhouse. We use bonds in probate cases as well. In probate cases, bonds are used as a type of insurance, protecting against damaged or lost estate property, and to protect creditors who have valid claims.
When someone passes away and a representative is appointed to handle the estate, in many cases, the probate court must order the representative to obtain a bond. Similarly, when someone is declared to be incapacitated in a guardianship proceeding, and the court appoints a guardian to handle that person’s property, the guardian must obtain a bond.
In both a decedent’s estate and a guardianship estate, the amount of the bond is determined by the value of the property subject to administration. Not all property factors into the bond amount – the value of real property does not affect the bond amount. Also, the amount of monthly income, and any debts owed by the estate, affects the amount of the bond.
When an estate representative or guardian mismanaged or misapplied estate property and harms the estate, then it is possible for an interested person to sue the representative or guardian, and if the lawsuit is successful, recover against the amount of the bond, so that the bond company must pay any judgment awarded.
This blog post has explained probate bonds and their function during estate disputes under Texas law. If you are facing possible litigation surrounding an estate, please reach out to one of our top Dallas, Texas, probate lawyers for a free consultation. Each situation is unique, and a consultation with a probate attorney can illuminate your possible legal options.