Surety Bond
An insurance policy that protects the estate's beneficiaries if the executor or administrator mismanages estate assets. Courts often require a surety bond, though some wills waive this requirement.
Legal Definition
A bond issued by a surety company that guarantees the faithful performance of a personal representative's duties, providing financial recourse to the estate and its beneficiaries in the event of the representative's misconduct, negligence, or misappropriation.
Practical Example
The court requires the administrator to post a $500,000 surety bond (the estimated estate value). The administrator pays an annual premium of about $2,500. If she mismanages the estate, the bonding company compensates the beneficiaries.