What is the purpose of a trustee bond?

• A. To ensure faithful performance of the trustee's duties.
• B. To guarantee the tax payment of the estate.
• C. To appoint a successor.
• D. To notarize documents.

Answer: (A)

A trustee bond exists to ensure faithful performance of the trustee’s duties. It’s a form of surety that protects the beneficiaries and the court: if the trustee mishandles estate or trust assets, fails to properly account, commingles funds, or breaches fiduciary obligations, the bond can be used to cover losses up to its amount. The court sets the bond to secure proper administration and accountability, giving beneficiaries a remedy if the trustee isn’t acting in accordance with the terms of the trust or will.

This isn’t about guaranteeing tax payments or notarization, and it doesn’t appoint a successor. Those functions are separate from the bond: taxes are handled through proper administration and tax filings, notarization is a notarial act, and appointing a successor is a different procedural matter.