What is a fiduciary bond?

A fiduciary bond involves three parties: the fiduciary, the court and the surety (the bond company). When the Court imposes a fiduciary bond requirement, then the fiduciary must purchase and post a fiduciary bond. Once the bond is posted, the bond company is obligated to pay the court a set amount if the fiduciary breaches their role in any way.

What happens if a fiduciary fails to pay a bond?

When a court mandates a fiduciary bond, the fiduciary must obtain and post the bond. Once the bond is posted, the surety company is obligated to pay a set amount to the court if the fiduciary fails to fulfill their obligations in any way. Such failures include fraud, embezzlement, or theft from the funds of the estate.

Do I need a financial advisor to obtain a fiduciary bond?

If you’re required to obtain a fiduciary bond, seeking professional advice is a good idea. A financial advisor can help you navigate the process of obtaining the bond, answer estate planning questions, compare rates from different bond companies and ensure that you purchase the right amount of coverage.