Probate bonds/Fiduciary Bonds

Probate bonds/Fiduciary Bonds

Probate bonds/Fiduciary Bonds

The word “fiduciary” refers to person or legal entities such as administrators, guardians and trustees who are appointed by the court to take control of property, manage it and transfer or distribute it as required by law.  These Surety Bonds can be required by the Probate Court, that’s why people refer to these different bonds as probate bonds. Probate bonds are a three-part agreement. The Principal, the Surety Company and the Obligee.  The Principal is the business or individual applying for the Surety Bond. The Obligee is the individual or entity requiring the Probate Bond and the Surety Company is the company who underwrites and provides the Surety Bond coverage. Unlike Insurance if a claim arises and The Surety Company Pays out on a claim, the Principal must reimburse the Surety for the Loss.  

The difference between Administrator bonds and Executor bonds? 

An Executor is a fiduciary named in a will to administrate an estate when a person dies.

An Administrator is when the court appoints a fiduciary to administer an estate because there is no will.

 In both cases a Probate bond can be required. The responsibilities and duties are somewhat the same for Executor and Administrators, but there are some distinctions. Executors settle the estate according to the will whereas Administrators settle the estate directives set by the court. The duties of the fiduciary is to pay all claims against the estate, collecting all assets of the estate and providing the court of all accounting. The administrator /executor must pay the surety premium until the court has discharged the fiduciary of his/ her duties.  We have several programs that can help you get bonded in most cases without an attorney or joint control.  

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Guardianship bonds/ Conservator bonds:

A guardian is anyone who has legal responsibility for the care of a person or person’s property (or both) because of the inability of the ward to manage his or her own affairs. A guardian is often appointed by the probate court to look after the minor or incompetent person. The incompetent person or minor is called a ward of the court. The fiduciary duties of the guardian is to ensure that the ward is properly supported and taken care of. The court may outline specific duties that the guardian must adhere to.  In order to protect the ward a guardianship bond is required. The guardianship bond protects the ward from a breach of the fiduciaries duties.   The guardian must provide an accounting for all money as well as property to the court when requested. Guardianship bonds cannot be cancelled and will remain in-force until the court proceedings have been closed and the fiduciary has been released from the court. Sometimes upon the surety’s discretion the surety may require several years of premium to be paid upfront, since the bond cannot be cancelled. We have several programs that can help you get bonded in most cases without an attorney or joint control.

VA Bonds

Typically the probate courts require fiduciary bonds, but this is not the case for Veterans with benefits. When a Veteran is no longer capable of taking care of him or herself The Department of Veterans Affairs will appoint a fiduciary to help manage their benefits. This bond is referred to as a VA Bond or Veteran Affairs bond. This bond is underwritten and treated just like a guardianship bond.

What do you do if you do not qualify for a Fiduciary bond?

We have several special programs where in most cases we can bond you without an attorney or Joint control. Sometimes you just need a little extra help and we have tools that can be utilized to help you get bonded.  One tool in our arsenal is Joint Control.  Joint Control is when a surety will help manage or will hire an independent party that will help you manage the dispersal of the estate. Both parties must sign off and give consent to disburse the funds or property in the estate.