Fiduciary Bond Information
Fiduciary bonds, also known as a probate bond or an estate bond, is a type of court bond which is requested by probate courts when appointing a fiduciary to a particular case. Fiduciaries are usually appointed to manage or administer estates, or any other assets of disabled, deceased or incompetent persons. Fiduciaries are often also referred to as administrators, guardians, trustees and executors. Therefore, fiduciary bonds are sometimes named after the respective function that a fiduciary has. For example, a trustee has a trustee bond. In essence, all of these serve the same purpose. Fiduciary bonds protect the persons whose estates or assets the fiduciary has been appointed to manage. If the fiduciary engages in dishonest practices, and is found guilty, the surety bond company backing the bond is there to rectify any such claims, up to the total amount of the bond. FAQ about Fiduciary - Probate Surety Bonds:
Who Needs to Obtain a Fiduciary Bond?
Fiduciary bonds may be required of anyone who has been appointed to take care of someone’s property or estate, assets, finances, or even affairs. Usually the recipients of a fiduciary’s services are minors, or disabled, deceased or incompetent persons. Heirs and beneficiaries also fall within this category. Fiduciary bonds might be required of guardians, administrators, executors, trustees, custodians, and others. These bonds are typically requested by probate courts appointing fiduciaries, rather than individuals.
Are There Different Types of Fiduciary Bonds?
A probate bond, an executor bond, a guardianship bond and an estate bond are alternative names for fiduciary bonds. There are also more specific types of probate bonds such as VA fiduciary surety bonds required when a fiduciary is appointed to take care of the assets of a veteran who cannot do so themselves. Occasionally there may be minor differences between these bonds according to state legislation, because they address different types of fiduciaries, but in practice they are usually used interchangeably and are not seen as separate types of bonds.
How Much Does a Fiduciary Bond Cost?
The cost of a fiduciary bond is a percentage of the whole amount of the bond. The amount of the bond, in turn, is directly linked to the value of the estate or assets that the fiduciary has to take care of. When determining your rate or premium, sureties will take your personal credit score into account. If you have a high score, you can expect your bond to cost between .5%-1% of the total amount of your bond.
Can I Get a Fiduciary Bond with Bad Credit?
Getting a probate bond with bad credit is possible, although only in certain instances and with individuals whose credit issues are minor. Those who have a very low credit score typically do not get approved for such a bond.