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local probate rule 4

PROBATE RULE 4: BONDS

A. AMOUNT OF BOND UNDER INDEPENDENT ADMINISTRATION OF ESTATE ACT (IAEA)
B. NON-RESIDENT PERSONAL REPRESENTATIVE
C. INCREASE OR DECREASE IN AMOUNT OF BOND
D. REDUCTION OF BOND IN FOLLOWING YEARS BY DEPOSITING ASSETS IN BLOCKED
ACCOUNT AND PROVIDING RECEIPTS

E. BOND ON BORROWING
F. BOND NOT REQUIRED WHERE TRUST COMPANY SERVES AS FIDUCIARY
G. STATEMENT RE SUFFICIENCY OF BOND IN REPORTS ACCOMPANYING ACCOUNTINGS

A. AMOUNT OF BOND UNDER INDEPENDENT ADMINISTRATION OF ESTATE ACT (IAEA)

If a bond is required of the personal representative, the amount of bond required of a personal representative granted full authority under the Independent Administration of Estates Act must include the estimated value of the personal property, the estimated net proceeds of the real property that may be sold under the IAEA, and the estimated value of the annual gross income of all of the property belonging to the estate.

B. NON-RESIDENT PERSONAL REPRESENTATIVE

The Court will ordinarily require a non-resident personal representative to post bond, even if the will waives bond, unless waivers of bond from all heirs or beneficiaries are filed, in which case the Court, in its sole discretion, may not require a bond.

(Eff. 1/01/09)

C. INCREASE OR DECREASE IN AMOUNT OF BOND

When it appears to the Court that the bond of any fiduciary is insufficient, the amount of the bond must be increased at the discretion of the Court. Counsel, personal representatives, guardians, and conservators are referred to CRC Rule 7.204, with regard to their duty to petition to increase the bond. When it appears that the bond of any fiduciary is in excess of the required amount, the fiduciary may petition the Court to reduce the bond. This petition may be presented ex parte. Fiduciaries and counsel should be aware that it is their responsibility to see that the bond amount is sufficient. Conservators and guardians of the estate must seek increases in bond amounts when necessary to meet the requirements of Probate Code § 2320 and CRC 7.207.

(Eff. 1/01/09)

D. REDUCTION OF BOND IN FOLLOWING YEARS BY DEPOSITING ASSETS IN BLOCKED ACCOUNT AND PROVIDING RECEIPTS

At any time, a fiduciary may request a reduction of bond or no bond if monies and/ or securities have been deposited into a blocked account in a financial institution or trust company. The order as well as the account must provide that no withdrawals be made without prior authorization by the Court.

(Eff. 7/01/08)

A petition to reduce the bond by blocked account deposits may be made ex parte. It is the responsibility of the fiduciary to prepare the Judicial Council form “Order to Deposit Money Into Blocked Account” (Judicial Council form MC-355 ). This form must be presented to the court for signature at the time the petition to reduce the bond is heard. The fiduciary must also prepare the form “Receipt And Acknowledgment of Order for the Deposit of Money Into Blocked Account” (Judicial Council form MC-356 ) and present it (along with a copy of the Order to Deposit Money) to the financial institution accepting the deposit for signature by an officer of that institution. The depository must file the Receipt within fifteen (15) days of the date of receipt. If the Receipt has not been filed within 45 days of the order, the fiduciary must file a written explanation with the Court stating the reason the Receipt has not been filed and when the fiduciary expects the Receipt to be filed.

Where the Court has approved such an order, the order appointing the fiduciary and letters of conservatorship or letters issued in an estate administration matter must state that the fiduciary has no authority to take physical possession of money or other property without specific court order.

If a fiduciary or party is using the "Order to Deposit Money Into Blocked Account" form for deposits in other than an interest bearing savings account, the fiduciary or party should adapt the form appropriately.

A petition for withdrawal of funds must be made on Judicial Council form “Petition For Withdrawal of Funds From Blocked Account (Judicial Council form MC-357 ), and the petitioner must submit for the Court’s signature the Judicial Council form “Order For Withdrawal of Funds From Blocked Account” (Judicial Council form number MC-358 ).

E. BOND ON BORROWING

A petition to borrow money must contain information sufficient for the Court to determine the proper bond amount.

F. BOND NOT REQUIRED WHERE TRUST COMPANY SERVES AS FIDUCIARY

When a trust company is serving as a guardian or conservator of the estate or as a trustee, bond is not required under Probate Code § 16602.

(Eff. 1/01/09)

G. STATEMENT RE SUFFICIENCY OF BOND IN REPORTS ACCOMPANYING ACCOUNTINGS

Fiduciaries must allege in all reports accompanying accountings whether or not the bond in the case is sufficient under Probate Code § 2320 and CRC 7.207, and, if not, what steps are being taken to comply with the law and rule.

(Eff. 1/01/10)




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