Fiduciary Bonds in Probate: A Cautionary Tale for Attorneys

Attorneys handling probate matters often rely on family members to serve as trustees, conservators, or other fiduciaries. When courts do not require a bond, however, both the beneficiary and the attorney may be exposed to significant risk.

In a recent case involving a court-approved special needs trust, approximately $250,000 in settlement funds were placed under the control of a parent serving as trustee. Because no fiduciary bond was required, the trustee was able to misappropriate most of the funds within two years, leaving the trust without assets.

The result was potential civil liability and criminal exposure for the trustee, along with possible disciplinary or malpractice risk for the attorney involved in the matter.

This scenario illustrates an important lesson for probate practitioners: even when a court does not require a bond, obtaining one can provide critical protection for beneficiaries, fiduciaries, and attorneys alike.

The article below discusses the legal implications of this situation and the value of fiduciary bonds in probate matters.

Key Takeaways for Probate Attorneys

• Fiduciaries such as trustees and conservators control significant financial assets.

• Without a fiduciary bond, misappropriated funds may be unrecoverable.

• Attorneys may face malpractice exposure or disciplinary scrutiny if obvious risks are ignored.

• Fiduciary bonds are often inexpensive relative to the protection they provide.

• In many situations, requesting a bond — even when not required by the court — is a prudent safeguard.

About the Author

Richard McNally - Owner of the McNally Mason Agency

McNally Mason Agency specializes in fiduciary, probate, and court bonds, including bonds for trustees, conservators, and VA fiduciaries.

Learn more:

• Trust Bonds
• Conservator Bonds
• Obtain a Bond