What is a trustee bond?
A trustee bond is a type of surety bond used in Rhode Island to provide financial protection for the beneficiaries of an inheritance. In Rhode Island, a trustee is the person or organization who is responsible for the management and dispersal of inherited assets. A bond is a contract between three parties: a principal (the trustee), an obligee (the beneficiaries) and a surety (an insurance company). A trustee bond provides a guarantee to the beneficiaries that the trustee will manage the inheritance according to the terms specified in the will. If the trustee fails to do so, then the beneficiaries may make a claim against the bond and receive compensation in the form of a paid claim. In Rhode Island, trustee bonds are required by law for all trustees and must be in an amount that is appropriate for the value of the estate being managed.
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