A trustee’s bond is essentially an insurance policy which designates a sum of money that may be recovered to the extent a trustee mismanages a trust estate. For example, if a trustee has a bond, and misappropriates assets, a beneficiary may be able to initiate a claim for breach of trust and recover against the bond in an amount equivalent to the loss.
In practice, it is quite uncommon to see a revocable or irrevocable trust require that a bond be posted to secure the trustee’s performance. The Missouri Uniform Trust Code does not generally require that a trustee post a bond. Under Section 456.7-702, RSMo, however, a court may order a bond if it is needed to protect the interests of the beneficiaries or is required by the terms of the trust. The Court has the ability to specify the amount of a bond, its liabilities, and whether sureties are necessary.