What is a trustee bond?
A trustee bond is a type of surety bond used in Indiana’s Inheritance Law. It is an agreement between a principal (the ‘trustee’) and an obligee (the ‘beneficiary’) that the principal will uphold their fiduciary duties to the beneficiary when managing assets that have been willed or otherwise bequeathed to them. The bond guarantees that the trustee will act according to the terms of the will and with full fidelity to the beneficiary. The bond helps ensure that the trustee properly administers the estate or trust of the decedent. If the trustee fails to carry out their duties in accordance with the law, the beneficiary or other parties may be able to make a claim against the trustee bond, which will cover the damages that may arise from the trustee’s breach of duty. Generally, the amount of the bond is calculated based on the amount of the estate or trust assets. The trustee bond includes several important aspects, such as a set penalty amount that the beneficiary can collect if the trustee fails to fulfill their duties, the right to file a claim against the bond, the process for appealing a denial of a claim, and the conditions under which the bond is terminated. It is important to understand all the aspects of a trustee bond before agreeing to enter into one.
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