How does a probate or personal representative bond work?

A probate bond, also known as an executor bond or fiduciary bond, is a type of insurance bond that is required in certain circumstances to protect the beneficiaries of an estate or trust. It is a legal requirement in many jurisdictions that the person who is appointed as the executor of a will or the trustee of a trust is required to obtain a probate bond as a condition of being appointed.

The purpose of a probate bond is to ensure that the executor or trustee of an estate or trust is financially accountable for any losses or damages that may be caused by their mismanagement or mishandling of the assets in their care. If the executor or trustee fails to fulfill their obligations, the bond will provide financial compensation to the beneficiaries of the estate or trust.

The cost of a probate bond is typically based on the value of the assets in the estate or trust, and the creditworthiness and history of the person who is required to obtain the bond. The executor or trustee must pay an annual premium for the bond, and the cost is typically deducted from the assets of the estate or trust.

If the executor or trustee is found to have mismanaged or mishandled the assets of the estate or trust, the beneficiaries of the estate or trust can make a claim against the probate bond to seek financial compensation. The amount of the compensation is usually limited to the face value of the bond.

Overall, a probate bond is a safeguard that provides assurance to the beneficiaries of an estate or trust that their interests will be protected, and that the executor or trustee will be held financially accountable for any misconduct or negligence.