ESTATE PROGRAM

What is an Estate Bond?

An estate bond, also known as a fiduciary bond, probate bond, executor bond, or administrator bond, is a financial guarantee that ensures the individual responsible for managing a deceased person’s estate fulfills their fiduciary duties faithfully and in accordance with the law.

These bonds are essential court mandates designed to protect the interests of the estate and its beneficiaries. When someone passes away, a responsible party—such as an executor or administrator—is appointed to handle the deceased’s affairs, including settling debts and taxes before distributing the remaining assets. The estate bond guarantees that the fiduciary will account for all transactions honestly and thoroughly, providing beneficiaries with confidence that their interests are safeguarded. It also serves as a safeguard against potential misconduct or evasive actions by the fiduciary, such as unauthorized withdrawals or misappropriation of estate assets.

It is important to note that an estate or probate bond is not an insurance policy. Instead, it is a contractual agreement where the bonded individual—the principal—is responsible for reimbursing the surety (the bonding company) for any payments made on their behalf should they fail to perform their duties properly. When purchasing the bond, the principal signs an Indemnity Agreement, promising to repay the surety for any losses incurred due to non-compliance.

Typically, obtaining the estate or probate bond is a prerequisite before the appointment of an administrator or executor can be finalized.