What a Texas Probate Bond Costs, and Who Pays It

A Texas probate bond usually costs about 0.5% to 1% of the bond amount a year for an executor or administrator with good credit, with a minimum premium of around $150 to $250 on small estates, and the estate pays it. The bigger number to understand is the bond amount itself, because the court sets it by formula and several rules can shrink it.

This guide covers the cost of bonds for executors and administrators under Chapter 305 of the Texas Estates Code. Guardians post a similar bond under a different chapter; see the Texas guardianship bond page for that.

What you pay: premium rates

Probate bonds are underwritten one at a time. The surety looks at the bond amount and the personal credit of the executor or administrator. These are the rates we publish on our Texas probate bond page:

Estate / bond size	Preferred rate	Standard rate
Under $100,000	$150–$250 (minimum premium)	$250–$400
$100,000–$500,000	0.5% of bond	0.75–1.0% of bond
$500,000–$2,000,000	0.5% of bond	0.75% of bond
Over $2,000,000	0.4% of bond (tiered)	0.5–0.7% of bond

Applicants with credit problems pay more, typically 1.5% to 3% of the bond amount. The premium is annual, and it continues until the court discharges you.

The rate is only half of the price. The other half is the bond amount, and that is where the real savings are.

How the court sets the bond amount

The judge sets the bond “in an amount considered sufficient to protect the estate and the estate’s creditors” (Estates Code §305.151(a)). Before setting it, the court hears evidence on the estate’s cash and where it is deposited, a year of administration expenses, the next 12 months of income, the value of stocks and other securities, life insurance payable to the estate, other personal property, and the estate’s debts (§305.152).

Then it applies the formula in §305.153(a). The bond equals:

1. the estimated value of all personal property in the estate, plus
2. the income expected over the next 12 months from interest and dividends, collectible claims, installment or periodic payments, and rent.

Two things are left out. Real estate is not personal property, so the house does not count toward the starting bond. And Social Security payments are excluded from the income figure.

A worked example, using only the formula:

Estate item	Counts toward the bond?	Amount
Checking, savings, and brokerage accounts	Yes	$180,000
Car and household goods	Yes	$20,000
Interest, dividends, and rent expected over 12 months	Yes	$6,000
Social Security payments	No	—
The house	No	—
Bond amount		$206,000

Your premium is the rate from the table above applied to that bond amount, not to the value of everything the person owned.

If you inherit everything, the bond covers creditors only

This rule can save the most, and few cost guides mention it. If the executor or administrator is entitled to the whole estate once debts are paid, the bond only has to be large enough to protect creditors (§305.151(b)). A surviving spouse or an only child who inherits everything may face a much smaller bond, sized to the estate’s debts rather than its assets. Raise it with your probate attorney before the hearing.

Who pays: the estate, with one catch

The Estates Code answers this directly: “The estate shall pay the cost of a bond with corporate sureties” (§305.202(b)). You don’t need court permission to pay it, because a personal representative may pay taxes, court costs, and bond premiums without a court order (§351.052(a)(6)). When the estate closes, the final account has to show that all required bond premiums were paid (§362.004(b)(9)).

The catch is the indemnity agreement. You sign it personally when you apply. If the surety pays a claim because of something you did, it comes back to you, not to the estate. Carrier applications also state that you remain personally responsible for the premium as a signer of the indemnity agreement. In practice the estate pays; legally, you are the backstop.

If the estate has no cash on hand at the start, executors commonly advance the first premium themselves and reimburse it from the estate once accounts are released.

How to lower the cost

Put cash in a restricted account

The court must reduce the bond in proportion to cash or securities placed in a court-restricted deposit (§305.153(b)). You can agree with the surety to keep estate cash at a Texas financial institution in an account that can’t be drawn on without the surety’s written consent or a court order (§305.154), or the court can order the deposit on its own terms (§305.155). Either way, the bond drops by the amount deposited. On an estate that is mostly cash, a restricted deposit can remove most of the bond, and most of the premium with it.

You can also deposit your own cash or securities instead of buying a surety bond, or to reduce one (§305.156).

Ask for a reduction later

Once debts are paid and assets distributed, the estate is smaller than it was on day one. You can apply to reduce the bond at any time; notice goes to interested persons and to the sureties (§305.255). A lower bond at renewal means a lower premium.

Use personal sureties (rarely worth it)

Texas allows a bond signed by individuals instead of an insurance company. It takes at least two, each must swear to a net worth, and together they must be worth at least twice the bond (§305.201, §305.203). The judge can require each of them to pledge Texas real estate as a lien (§305.204), and on a bond over $50,000 the court may insist on at least one corporate surety (§305.202(a)). Few families want a relative’s house pledged to an estate, which is why most buy the corporate bond.

When no bond is needed at all

Some executors never pay for a bond. A will that directs that no bond be required of the named executor removes it (§305.101(b)). If the will is silent, the court may waive the bond when all of the distributees agree, unless it finds a waiver is not in the estate’s best interest (§401.005(a-1)). Corporate fiduciaries post no bond (§305.101(c)). These are decisions for the will’s author, the heirs, and the court, and your attorney will know whether any apply. Our executor bond page covers the waiver rules, and the administrator bond page covers estates with no will.

How long you pay

The bond runs from the day it is approved until the court discharges you. The court enters the discharge order once the estate is fully administered, the final account is approved, and the remaining property has been delivered (§362.013). Premiums keep renewing every year until the surety receives that order. Carrier applications commonly state that the first year’s premium is not refundable.

Two events can change the cost mid-stream:

• Selling real estate. Under a general bond, the court must decide before approving a sale whether the bond still covers the estate once the sale money comes in. If not, the bond goes up by the sale price before the sale is approved (§356.554).
• An order for a new bond. Until the new bond is given and approved, you may not pay out estate money or take any other official action except to preserve estate property (§305.254(b)). Get the order to your surety the day it is signed.

Getting a quote

To quote a probate bond we need the court’s order, or the expected bond amount if the hearing hasn’t happened yet, and a short application from the executor or administrator. The bond must be filed before the 21st day after the order granting letters (§305.004(a)), so start when the hearing is set, not after.

Call us at (281) 484-8320, or start a quote from our Texas probate bond page.