What is a fiduciary bond?

A fiduciary bond, also known as a probate bond or executor bond, is a type of surety bond that is required of individuals who are appointed to manage the assets and finances of others, known as fiduciaries. This can include executors of estates, trustees, guardians, and administrators.

The purpose of a fiduciary bond is to protect the assets of the estate or trust from mismanagement or fraud by the fiduciary. If the fiduciary fails to fulfill their duties or acts against the best interests of the estate, a claim can be made against the bond to recover losses.

Fiduciary bonds are typically required by courts when appointing a fiduciary to ensure that they can be held accountable for their actions. The bond amount is usually based on the value of the assets that the fiduciary will be managing.

Fiduciary bonds are a form of insurance for the beneficiaries of the estate or trust, providing a guarantee that their interests will be protected. They are often required in situations where a substantial amount of assets are involved or when there is a risk of mismanagement by the fiduciary.