Amended in Assembly March 19, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2567

Introduced by Assembly Member Daly

February 21, 2014

An act to amend Sections 8482 and 10453 of, to add Section begin delete 8480.5 end delete begin insert 8482.5 end insert to, and to repeal and add Section 8481 of, the Probate Code, relating to decedents.

LEGISLATIVE COUNSEL’S DIGEST

AB 2567, as amended, Daly. Decedents’ estates: personal representative: bond.

(1) Existing law requires every person appointed as a personal representative of a decedent’s estate to give a bond conditioned on the faithful execution of the duties of the office. Existing law authorizes a waiver of this bond in certain circumstances and also authorizes the court to fix the amount of the bond not to exceed a specified sum.

The bill would, with respect to the above-described bond, require a court to make a good begin delete faith end delete begin insert cause end insert determination that the beneficiaries and creditors of the estate will not suffer harm as a result of the waiver of a bond or reduction of the bond amount before authorizing this waiver or reduction. This bill would also require a person appointed as a personal representative to give a cost bond approved by the court to be used to satisfy the remainder of an amount awarded to a contestant of an account, as specified.

The bill would require, when a personal representative has actual or constructive knowledge of facts indicating that the amount of a bond given is less than the amount fixed, the personal representative and, if any, the attorney, to make an ex parte application for an order to increase the bond, as specified. The bill would also require, if an additional amount is required for the bond, an order approving an account to be conditioned on the filing of the additional bond amount.

(2) The Independent Administration of Estates Act governs the independent administration of a decedent’s estate and requires, if a personal representative is otherwise required to file a bond, a court, in its discretion, to fix the amount of this bond.

This bill would remove the discretion of the court to fix the bond amount.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 8480.5 is added to the Probate Code, to
read:

8480.5.  

(a) In addition to the bond required pursuant to Section
8480, a person appointed as a personal representative shall give a
cost bond approved by the court to be used to satisfy the remainder
of an amount that may be awarded to a contestant of an account
pursuant to subdivision (b) of Section 11003 after a final
determination that the opposition to the contest was without
reasonable cause and in bad faith. The amount of this cost bond
shall be no less than twelve thousand dollars ($12,000) nor greater
than fifty thousand dollars ($50,000) and shall be based upon all
of the following:

(1) The size of the estate.

(2) The nature and number of the assets.

(3) The anticipated complexity of the accounting.

(b) When a personal representative has actual or constructive
knowledge of facts indicating that the amount of the bond given
is less than the amount fixed pursuant to subdivision (a), the
personal representative and, if any, the attorney, shall make an ex
parte application for an order to increase the bond pursuant to
subdivision (a). If an additional amount is required, an order
approving an account shall be conditioned on the filing of the
additional bond amount.

end delete

begin delete SEC. 2. end delete
begin insert SECTION 1. end insert   

Section 8481 of the Probate Code is repealed.

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 8481 is added to the Probate Code, to read:

8481.  

begin delete (a) end delete begin delete   end delete The court may waive the filing of a bond described
in Section 8480 or, notwithstanding begin delete Section end delete begin insert Sections end insert 8482 begin insert and
8482.5 end insert , reduce the amount of this bond only if both of the following
conditions are met:

begin delete

(1)

end delete

begin insert (a) end insert  The will waives the requirement of a bond or, unless the
will requires a bond, all beneficiaries waive in writing the
requirement of a bond and the written waivers are attached to the
petition for appointment of a personal representative.

begin delete

(2)

end delete

begin insert (b) end insert  The court makes a good cause determination that the
beneficiaries and creditors of the estate will not suffer harm as a
result of the waiver or reduction of the bond amount. For purposes
of this subdivision, the filing of a bond in another or a prior
proceeding by the personal representative shall not, by itself,
establish a basis for good cause.

begin delete

(b) Notwithstanding subdivision (a), the court may reduce the
amount of a bond if the decedent had sufficient capacity to waive
the filing of a bond and waived it for a trustee or named successor
trustee.

end delete

begin delete SEC. 4. end delete
begin insert SEC. 3. end insert   

Section 8482 of the Probate Code is amended to read:

8482.  

(a) The court shall fix the amount of the bond required
pursuant to Section 8480 at not more than the sum of:

(1) The estimated value of the personal property.

(2) The probable annual gross income of the estate.

(3) If independent administration is granted as to real property,
the estimated value of the decedent’s interest in the real property.

(b) Notwithstanding subdivision (a), if the bond is given by an
admitted surety insurer, the court may establish a fixed minimum
amount for the bond, based on the minimum premium required by
the admitted surety insurer.

(c) If the bond is given by personal sureties, the amount of the
bond shall be twice the amount fixed by the court under subdivision
(a).

(d) Before confirming a sale of real property the court shall
require such additional bond as may be proper, not exceeding the
maximum requirements of this section, treating the expected
proceeds of the sale as personal property.

(e) When a personal representative has actual or constructive
knowledge of facts indicating that the amount of the bond given
is less than the amount fixed pursuant to subdivision (a), the
personal representative and, if any, the attorney, shall make an ex
parte application for an order to increase the bond pursuant to
subdivision (a). If an additional amount is required, an order
approving an account shall be conditioned on the filing of the
additional bond amount.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 8482.5 is added to the end insert begin insert Probate Code end insert begin insert , to read: end insert

begin insert

begin insert 8482.5. end insert   

(a) The bond required pursuant to Section 8480 shall
include, in addition to coverage for protection of estate assets in
the amount set forth in Section 8482, an amount for recovery of
any attorney’s fees and costs awarded pursuant to subdivision (b)
of Section 11003 for a successful contest of accounting resulting
in a surcharge against the personal representative to be calculated
as follows:

(1) Ten percent of the amount that does not exceed five hundred
thousand dollars ($500,000), of all of the following:

(A) The estimated value of the personal property of the estate.

(B) The probable annual gross income of the estate.

(C) If independent administration is granted as to real property,
the estimated value of the decedent’s interest in the real property.

(2) Twelve percent of the amount greater than five hundred
thousand dollars ($500,000), but not exceeding one million dollars
($1,000,000), of the property and income described in paragraph
(1).

(3) Two percent of the amount greater than one million dollars
($1,000,000), of the property and income described in paragraph
(1).

(b) When a personal representative has actual or constructive
knowledge of facts indicating that the amount of the bond given
is less than the amount fixed pursuant to subdivision (a), the
personal representative and, if any, the attorney, shall make an
ex parte application for an order to increase the bond pursuant
to subdivision (a). If an additional amount is required, an order
approving an account shall be conditioned on the filing of the
additional bond amount.

end insert

SEC. 5.  

Section 10453 of the Probate Code is amended to read:

10453.  

(a) If the personal representative is otherwise required
to file a bond and has full authority, the court shall fix the amount
of the bond at not more than the estimated value of the personal
property, the estimated value of the decedent’s interest in the real
property authorized to be sold under this part, and the probable
annual gross income of the estate, or, if the bond is to be given by
personal sureties, at not less than twice that amount.

(b) If the personal representative is otherwise required to file a
bond and has limited authority, the court shall fix the amount of
the bond at not more than the estimated value of the personal
property and the probable annual gross income of the estate, or, if
the bond is to be given by personal sureties, at not less than twice
that amount.