Question 1

What are fiduciary bonds and when are they required?

Accepted Answer

Fiduciary bonds are court-required surety bonds that protect beneficiaries when someone is appointed to manage estate or trust assets. They are required for executors, administrators, guardians, conservators, and trustees unless specifically waived by the court or will. Premiums typically range from 0.5% to 3% annually of the bond amount.

Question 2

How much do fiduciary bonds cost?

Accepted Answer

Fiduciary bond costs range from 0.5% to 3% annually based on credit score, estate size, and fiduciary experience. For example, a $100,000 estate bond might cost $500 to $3,000 per year. Professional fiduciaries with excellent credit (750+) typically qualify for the lowest rates around 0.5-1%.

Question 3

What is the difference between executor bonds and administrator bonds?

Accepted Answer

Executor bonds are required when someone named in a will administers an estate according to will provisions. Administrator bonds are required when someone is court-appointed to manage an intestate estate (no valid will exists). Both protect beneficiaries from fiduciary mismanagement, with similar costs and requirements.

Question 4

Can fiduciary bonds be waived by the court?

Accepted Answer

Yes, courts may waive fiduciary bonds if the will specifically requests it and all beneficiaries consent, or if the fiduciary is a bank or trust company with adequate capital. However, many courts still require bonds for individual fiduciaries even with will waivers, especially for large or complex estates.

Question 5

How long do fiduciary bonds remain in effect?

Accepted Answer

Fiduciary bonds remain active throughout the entire estate or trust administration period, which typically ranges from 6 months to 3+ years. The bond must be renewed annually with premium payments. Courts release bonds only after final accounting approval and distribution completion.

Question 6

What happens if there is a claim against a fiduciary bond?

Accepted Answer

If beneficiaries file a valid claim for fiduciary breach, the surety investigates and may pay damages up to the bond amount. The fiduciary is personally liable to reimburse the surety. Claims commonly arise from commingling funds, unauthorized distributions, or failure to preserve estate assets.

Question 7

Do professional fiduciaries need bonds?

Accepted Answer

Yes, professional fiduciaries (individuals or companies providing fiduciary services for compensation) typically need higher bond amounts due to managing multiple estates. Many states require professional fiduciaries to maintain continuous bonds as a licensing condition, with amounts often exceeding $100,000.

Question 8

Can I get a fiduciary bond with bad credit?

Accepted Answer

Yes, fiduciary bonds are available for individuals with challenged credit, but premiums will be significantly higher (2-5% instead of 0.5-1.5%). Courts may also require collateral or co-signers for large estates. Professional help from estate attorneys can improve approval chances and potentially lower costs.

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Understanding Probate Bonds

What Are Probate Bonds?

When Are They Required?

Related Bond Types for Complex Situations

How Fiduciary Bonds Protect Beneficiaries

Financial Protection

Court Requirement

Claims Process

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