What is a trustee bond?
A trustee bond is a type of surety bond which is required by certain states, including North Carolina, when an individual is appointed to serve as a trustee of an estate or trust. This bond provides financial protection for the beneficiaries of the trust or estate in the event that the trustee fails to carry out the duties of the trustee to manage the assets of the trust or estate properly. The trustee bond guarantees that if the trustee mismanages funds, takes funds that aren’t theirs, or does not carry out their duties correctly, the beneficiaries of the trust or estate can file a claim against the bond and will be compensated for any losses that are incurred. The cost of the trustee bond is usually based on the amount of money in the trust or estate, and can range anywhere from one to two percent of the total value. The bond is purchased from an insurance company and there are a few things that must be taken into consideration when selecting an insurance company for a trustee bond. The insurance company must have adequate financial resources in case a claim is made on the bond and they must be knowledgeable about the laws governing trustee bonds in the state of North Carolina. The trustee bond is a critical component of inheritance law, and it is important for the trustee to understand and comply with the laws and regulations governing the trustee bond in the state of North Carolina. Failing to do so could result in serious financial repercussions for both the trustee and the beneficiaries of the trust or estate.
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