Instead of passing on an estate outright, an individual might establish a trust or trusts for his/her beneficiaries.
- A trust is a document that looks similar to a will. It gives instructions for how you want your property and assets to be handled and distributed to your beneficiaries.
- A trust under a will is called a testamentary trust. A trust established while the individual is living is called an inter vivos trust.
The Trustee is the individual in charge of administering the trust. Normally, trustees are listed in a will, but anyone can be appointed as a trustee.
Trustees might be required to secure a Trustee Bond before they start performing their duties.
What is a Trustee Bond?
A Trustee Bond is a type of surety court bond.
It is the duty of the Trustee to take control over the property and assets, and to administer them according to the terms of the trust. A Trustee Bond guarantees the trustee does this according to the trust and according to the law.
If they fail to do so according to law, someone can make a claim against their Trustee Bond.
How Much Does a Trustee Bond Cost?
The Trustee Bond amount is usually determined by a judge. The bond amount will vary based on the specifics of the case.
Trustee Bonds remains in place the entire length of time you are appointed trustee. Because of this, there will be an annual premium charged for the bond that must be paid until the bond is cancelled.
Your bond premium is a percentage of your total bond amount.
The best way to see what you’d pay for a Trustee Bond is to get a free quote:
How to get a Trustee Bond
If the court requires a Trustee Bond, it will let you know. The best way to get a Trustee Bond is to work with a surety bond company.
An underwriter will work with you to evaluate the risk of bonding you. The following aspects are looked at when issuing a Trustee Bond:
- Degree of Risk: How risky is it to bond this individual? How long will the trustee serve for?
- Qualifying Principal: What is the background and experience of the trustee? Are they financially stable? Are they responsible and reputable?
- Court Papers: Copies of the trust and will are required. Terms and conditions will be evaluated.
- Professional Credentials: Is there an attorney involved? Are they experienced and reliable?
- Location of funds, if any: Where are the funds being held?
- Prior Fiduciary: Was there a prior fiduciary (executor, administrator, trustee)? Were they bonded? Were any claims made on the bond?
If you are approved for a Trustee Bond, the surety company will determine your bond rate.