Probate / Fiduciary Bond

A probate bond, also called a fiduciary bond, is a type of court bond that a probate court requires before it will let an individual serve as the fiduciary over someone else's property. The person appointed — an executor of a will, an administrator of an intestate estate, a guardian of a minor, a conservator of an incapacitated adult, or a trustee — must post the bond to guarantee that they will handle the assets honestly, keep proper accountings, and follow the court's orders and the law. As a form of surety bond, it is a three-party arrangement: the fiduciary is the principal, the court (on behalf of the estate's heirs, beneficiaries, and creditors) is the obligee, and the surety guarantees performance.

For families and small-business situations, the bond matters because it converts the court's trust in an appointed individual into a financial guarantee. If the fiduciary steals, misinvests, pays themselves improperly, or otherwise causes loss to the estate, the harmed beneficiaries can make a claim against the bond and be reimbursed up to the bond's penal sum. Critically, because it is surety and not insurance, the surety that pays a claim will then seek full indemnity from the fiduciary personally — so the bond protects the beneficiaries, not the fiduciary. The required amount is set by the court, usually keyed to the value of the personal property and expected income of the estate, and can be increased or reduced as the estate is administered.

Practically, whether a bond is required depends on the jurisdiction and the will: many wills waive bond for a named executor, and courts may waive or reduce it when all beneficiaries consent. When a bond is ordered, the surety underwrites the fiduciary's credit and background, and premiums are typically a small percentage of the bond amount, paid from estate funds. Anyone asked to serve should confirm the exact bond amount early, since posting it is a precondition to receiving letters testamentary or letters of administration and beginning to act for the estate.