If you work in estate administration, probate, or elder law, you already know the probate/fiduciary bond exists to protect an estate from its own fiduciary. What a lot of attorneys, executors, and family members don’t realize until it’s too late: the bond does not cover every way an estate can lose money. It only responds when the loss is caused by the fiduciary’s own breach of duty, and even then, it usually requires a court finding before a claim gets paid.

So what happens when the money disappears some other way? Here are a few real patterns worth knowing, and a coverage concept I’d like to see the insurance market actually build to address them.

Scenario 1: The Trusted Fiduciary Who Wasn’t

In one widely reported case, a 66-year-old man befriended a 92-year-old woman with dementia, was named her trustee and executor, and systematically drained $3.7 million from her accounts over time through withdrawals, checks, and credit card charges, spending it on vacations, dining, shopping, and even cosmetic surgery. By the time it was discovered, the estate and her heirs were left with almost nothing.

This is exactly the scenario a fiduciary bond is designed for: a court-appointed fiduciary breaching their duty. But bonds have penal limits, claims take time, and recovery from the wrongdoer personally is often difficult if the money’s already spent. This is where fiduciary liability insurance, a real but separate product from the bond, can add a second layer, and where red-flag detection (unusual withdrawal patterns, vague accountings, spending inconsistent with the ward’s lifestyle) matters just as much as insurance.

Scenario 2: The Email That Wasn’t Really From the Attorney

Business email compromise (BEC) schemes targeting law firms and estate/trust accounts have become a documented, coordinated threat, not isolated incidents. The pattern: a criminal registers a domain that differs from the real law firm’s by a character or two, then sends fraudulent wire instructions that appear to come from the attorney handling an estate or trust distribution. The funds get wired to an account the criminal controls, often before anyone realizes the email wasn’t legitimate.

This isn’t a fiduciary breach. The fiduciary didn’t steal anything, they were deceived, same as the bank or the law firm processing the transfer. A probate bond generally will not respond to this, because the loss wasn’t caused by the fiduciary’s own wrongdoing. This is squarely what social engineering fraud coverage and funds transfer fraud coverage (existing endorsements to a crime or cyber policy, but built for institutions, not individual estates) are designed for.

Scenario 3: Family Financial Exploitation Disguised as Normal Transactions

Trusts and estates fraud investigators point to a recognizable set of red flags: sudden shifts in account balances, unexplained missing assets, transactions between the trust and the trustee or their associates, vague or late accountings, and large gifts or withdrawals timed suspiciously close to a death. These cases often involve a family member or caregiver rather than a professional fiduciary, and by the time anyone notices, hundreds of thousands or millions of dollars can be gone.

Depending on how the funds moved, this could trigger a bond claim (if a bonded fiduciary caused it and a court finds breach of duty), a fiduciary liability claim (for negligence or mismanagement), or fall into a coverage gap entirely if no bond was required and no supplemental coverage was in place.

Coverage Ideas for a Package Policy (EstateGuard Concept)

Concept only. No carrier currently offers this package. Trigger and limit figures are illustrative, based on comparable existing commercial and personal lines products, not confirmed terms for a real policy.

An Idea Worth Building: EstateGuard

Important: EstateGuard is not an existing insurance product. It does not exist yet, no carrier offers it today, and nothing described below can currently be purchased. This is a concept I am floating publicly and directly to carriers and wholesale brokers, in hopes that an interested market steps forward to actually build it.

Here’s the gap as I see it. Funds transfer fraud coverage, social engineering fraud coverage, and fiduciary liability insurance already exist, but almost exclusively as annual commercial policies sold to banks, trust companies, law firms, and RIAs. An individual estate, a private fiduciary, or a family member serving as executor generally cannot buy any of this directly today. Given how often these losses actually happen to ordinary families and small estates, not just institutional fiduciaries, that seems like a real gap.

The concept: a package policy, tiered by estate value, that bundles funds transfer fraud, social engineering fraud, and fiduciary liability protection specifically for probate estates and the fiduciaries administering them. It could work two ways:

• Annual coverage for professional or repeat fiduciaries (attorneys, corporate trustees, professional fiduciaries) who administer multiple estates over time.
• Per-case coverage purchased alongside the probate bond itself, priced to the estate’s value, for individual executors or family fiduciaries handling a single estate.

Pricing scaled to estate value already exists elsewhere in the market, high-net-worth personal lines carriers tier homeowners and personal cybercrime coverage by asset value today. Extending that logic to estates in probate does not seem like a stretch. It seems like an underserved niche.

A Direct Ask to Insurers and Wholesale Markets

If you underwrite crime, cyber, or fiduciary liability coverage and think your company might have an appetite for this, I would like to hear from you. Whether you are a carrier, an MGA, or a wholesale broker with access to markets like Chubb, Travelers, AIG, or others active in crime and fiduciary liability lines, I am actively looking to connect with the right underwriting team to explore whether a product like this could be built, priced, and brought to market, sold either annually to professional fiduciaries or on a per-case basis alongside a probate bond.

Reach out directly. I’d welcome the conversation.

Phil Pavarini Jr. is an independent insurance agent and surety bond specialist based in Hendersonville, NC, licensed in more than 30 states.