Protecting Beneficiaries, Heirs, & Creditors From Fiduciary Misconduct
When a court appoints a fiduciary to manage money or property on behalf of others, trust is paramount. To ensure that trust is upheld, many courts require fiduciaries to obtain a fiduciary surety bond. These bonds are designed to ensure fiduciaries act in good faith and provide financial protection for individuals who cannot manage their own affairs.
Here at King Risk Partners, we make the bonding process simple and straightforward. Whether you’ve been appointed as an executor, administrator, guardian, or trustee, our experienced surety agents can help you secure the bond you need quickly and at an affordable price. Contact us today to speak with a friendly agent and take the first step toward getting bonded!
What Is A Fiduciary Bond?
A fiduciary bond, also referred to as a probate bond or an executor bond, is a type of commercial surety bond required by courts to protect beneficiaries, heirs, creditors, and others from financial harm caused by a fiduciary’s negligence, misconduct, or failure to perform their duties properly. Because fiduciaries have access to funds, property, and sensitive financial matters, courts often require this bond as a safeguard. In the event a fiduciary is negligent or otherwise fails in their duties, the affected party may file a claim against the bond to recover any monetary damages.
How Fiduciary Surety Bonds Work
Fiduciary surety bonds are three-party agreements that serve as a form of financial guarantee. The three parties involved in the agreement are:
- The Principal: The fiduciary required to obtain the bond.
- The Obligee: The court or governing authority requiring the bond.
- The Surety: The bonding company guaranteeing the fiduciary’s performance.
If an appointed fiduciary fails to properly manage the estate or assets, whether due to fraud or failure to follow court instructions, a claim may be filed against the bond. If the claim proves valid, the surety may compensate the affected party up to the bond amount. Then, the fiduciary is ultimately liable to repay the surety for any losses.
Frequently Asked Questions
The exact cost of a fiduciary bond will vary depending on a number of factors. However, rest assured that the price, known as the bond premium, will only be a small percentage of the total bond amount. A few factors that can affect a bond’s price include your credit score, the value of the estate or assets involved, and the required bond amount. Applicants with strong credit may pay as low as 0.5% of the total bond amount. To learn more about how much a fiduciary bond costs, give us a call and speak with one of our friendly surety specialists.
Yes, it’s still possible to get bonded with poor credit. While credit history is a factor in underwriting, it’s not the only thing that’s considered. Applicants with healthier credit scores tend to score lower rates, but in most cases, applicants with less-than-ideal credit history can still get bonded. Here at King Risk Partners, we have experience helping applicants across a range of financial backgrounds get bonded at competitive rates.
Getting bonded is easy, just call King Risk Partners! A friendly surety agent with our insurance company can guide you through our simple, straightforward bonding process and help you obtain the fiduciary bond you need to meet court requirements. Contact us today to take the first step towards getting bonded!