Bond obtained by an executor of an estate; ensures the proper performance of the trustee and ensures against theft or misappropriation of trust assets

Bond obtained by an executor of an estate; ensures the proper performance of the trustee and ensures against theft or misappropriation of trust assets

• A. Fidelity bond
• B. Surety bond
• C. Performance bond
• D. Insurance bond

Answer: (B)

When someone is appointed to manage an estate or trust, the court often requires a bond to ensure duties are performed faithfully and to protect the assets from mismanagement or theft. This is a fiduciary bond, a type of surety bond. A surety bond is issued by a surety company and guarantees that the fiduciary will carry out their duties and safeguard the trust’s assets; if mismanagement or theft occurs, losses can be covered by the bond. A fidelity bond, in contrast, protects an employer from losses due to employee dishonesty, not the fiduciary’s performance in managing the estate. A performance bond guarantees the completion of a contract, not fiduciary duties. An insurance bond is not the standard term used in this context. Therefore, the bond described is a surety bond.

When someone is appointed to manage an estate or trust, the court often requires a bond to ensure duties are performed faithfully and to protect the assets from mismanagement or theft. This is a fiduciary bond, a type of surety bond. A surety bond is issued by a surety company and guarantees that the fiduciary will carry out their duties and safeguard the trust’s assets; if mismanagement or theft occurs, losses can be covered by the bond.

A fidelity bond, in contrast, protects an employer from losses due to employee dishonesty, not the fiduciary’s performance in managing the estate. A performance bond guarantees the completion of a contract, not fiduciary duties. An insurance bond is not the standard term used in this context. Therefore, the bond described is a surety bond.