What is a trustee bond?
A trustee bond is a type of insurance policy required by the courts in Florida to protect an inheritance account held in trust. The bond serves as a guarantee that the trustee will act in accordance with the terms of the trust and will handle the assets responsibly. If the trustee fails to do this, the bond would provide compensation to the beneficiaries of the trust. The bond amount must be equal to or greater than the total assets held in the trust. In the event that the trustee mismanages the trust, is found guilty of fraud, or takes actions that are deemed unethical by the court, the beneficiaries can make a claim against the bond. The bond company will then investigate the complaint and, if satisfied, pay compensation to the beneficiaries up to the amount of the bond. Trustees who are deemed unsuitable to manage the trust by the court must take out a bond. This is to protect the beneficiaries from any losses arising from the trustee’s failure to handle the assets properly. The court may also require a trust company or common law fiduciary to post a trustee bond. In Florida, trustee bonds must be purchased from a surety company certified by the Florida Department of Financial Services and based on a valid trust agreement. The surety company will review the trust agreement and the amount of assets held in the trust to determine the bond amount needed. It is important to note that the bond should be kept active for the life of the trust.
Related FAQs
What are the advantages and disadvantages of a living trust?What is a living will?
What is an Asset Protection Trust?
What is the difference between a will and a trust?
How can a trust be terminated?
What is a testamentary trust?
What is a discretionary trust?
What is the difference between a lifetime gift and a testamentary gift?
Is a living trust based on state or federal law?
What is a spendthrift trust clause?
Related Blog Posts
Understanding the Basics of Inheritance Laws: A Guide to Successfully Navigating State and Federal Statutes - July 31, 2023How to Ensure Your Estate Plan Reflects Your Wishes Through Inheritance Laws - August 7, 2023
Protect Your Rights as a Beneficiary: Understanding Your Legal Rights After Beneficiary Inheritance - August 14, 2023
Comprehending the Duties and Responsibilities of Executors of Estates: How to Properly Administer an Estate and Fulfill Inheritance Law Requirements - August 21, 2023
Maximizing the Benefits of Inheritance Law for Family Heirs of Estates - August 28, 2023