A Fiduciary Bond is required when one person is appointed to act on behalf of another. This is typically done when a third party manages the affairs or finances of another party. This could also happen when a person is deemed incapable of handling their own estate.
These services are most often court-ordered but can, in some cases, be voluntarily appointed by the estate holder. In either case, court-ordered or voluntarily, a surety bond is designed to help protect the estate owner. This protection could be from any financial loss incurred from any mishandling or unlawful actions performed by the appointed.
Common types of Fiduciary Bonds include:
An administrator bond is required when a person has been appointed to handle the estate of the deceased. In this case, the bond is there to protect the administration of a will, estate, or guardianship from any financial wrongdoing. The court decides the bond amount.
An Executor Bond is required when a person has been appointed to handle the estate of a deceased person in a will. Unlike Administrator Bonds where the court orders the appointment, in the case of an executor bond, the appointment is described in the will.
A Conservatorship Bond is required when the courts appoint a person to handle the estate of a person who has been deemed unable to take care of their own financial affairs.
A guardianship bond is required when the court appoints someone to protect the assets of a minor until they reach the legal age of maturity.
Similar to Executor Bonds, a Trustee Bond is required when a person is appointed to handle the estate of a deceased person as listed in the trust. A trust is not the same as a will.