A Guide About Court and Fiduciary Bonds
A court may require a fiduciary bond for a person or party that has fiduciary responsibility to another. A fiduciary bond is a legal instrument that protects the beneficiaries, heirs, and creditors in the event when a fiduciary fails to perform honestly and proficiently. A fiduciary can be a personal representative, financial adviser, trustee, executor, administrator, guardian, or anyone who is appointed by the court to exercise control over another person’s or business’ assets or property.
The beneficiaries, heirs, or creditors can also request a fiduciary bond if they are concerned about the financial status or loyalty of a fiduciary. The bond will assure them that their assets or properties will be protected and the fiduciary will comply with his/her duties and responsibilities. Some of the common types of fiduciary bonds are conservators of incompetence, receiver of rent or money owed, administrator/executor/trustee of estates, and trustee or trustees in bankruptcy.
The cost of a court & fiduciary bond is usually equivalent to the estimated amount of assets or properties being managed, sometimes even higher.