What is a trustee bond?
A Trustee Bond is a type of surety bond that is used in estate planning and inheritance law in the state of California. It is a contract between a trustee (or executor) of a trust and a third party, usually an insurance company, that guarantees the trustee will fulfill their duties as outlined in the California Probate Code. The bond protects the beneficiaries of a trust from possible fraud, mismanagement, or other malfeasance by the trustee. The trustee must pay a premium to the third party in exchange for the bond; the amount of the premium is usually determined by the size of the trust and the complexity of the trust. In the event that the trustee fails to perform their duties, the third party is responsible for any damages incurred by the beneficiaries of the trust. The bond also serves to protect the trustee from any wrongful acts they may have committed while serving as trustee. It is important to note that the trustee bond does not replace the need for executor insurance, which requires additional premiums.
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