Every state has its own rules when it comes to the obligations placed on the personal representative of an estate. Here in Minnesota, a bond isn’t necessarily required of a personal representative.
However, you should think long and hard about the issue before you decide to use your will to specifically exclude your chosen personal representative from the bond requirement – both for their sake and to protect your estate.
What’s the point of a bond?
A bond serves as a form of insurance. Simply put, your bond protects your beneficiaries and heirs from losses caused by fraud or misconduct on the part of your personal representative.
While you may absolutely trust the person you’ve chosen to handle your estate, the reality is that they could easily make a mistake with the estate’s assets, especially if the estate is complex. Even an honest mistake could lead to the mismanagement of assets and huge losses that affect the inheritances you want to leave behind.
A bond also protects your personal representative. If they do make a mistake, they could be personally liable for any financial losses the estate or other interested parties incur. If a personal representative fails to pay a creditor, for example, before they disburse the funds that belong to the estate to your beneficiaries, that creditor could try to collect directly from the personal representative. (Creditors are, in fact, sometimes entitled to demand that a personal representative be bonded, but the court may or may not choose to require it.