Chances are if you need a fiduciary probate bond, you are either managing money of a deceased person’s estate or you are managing the money of someone who the County Probate Court Judge has found to be incompetent or incapacitated; therefore, they aren't able to manage their money themselves.
If you decide to serve as a fiduciary then you will have to petition the County Probate Court to be appointed as one of the following:
- Personal Representative
The County Probate Court Judge has to appoint you to take on the responsibility of managing monies that aren't yours.
In many cases the court will also require you to submit a bond with your petition. Since you are going to be managing an estate or some amount of money that doesn't belong to you, the bond will safeguard the monies in question. By qualifying with the insurance company for a bond, you are showing the County Probate Court that not only are you capable of managing someone else's funds, you are also insured to do so as well.
If the fiduciary or person appointed and bonded commits fraud, theft or embezzles the monies that they're entrusted to manage, the bond may help limit the amount of damage to the trust or estate. There can also be non-intentional acts committed by the fiduciary. A fiduciary may carelessly or negligently deplete assets that they're supposed to protect. The bond amount is usually equal or greater than the amount of assets managed. In the event of a claim, the insurance company will be demanded by the County Probate Court to investigate and potentially replace the amount lost but this amount cannot exceed the bond's limit.