What is a Fiduciary Bond?
A fiduciary bond is a judicial bond that guarantees that a court-appointed fiduciary, an executor or guardian, performs all duties. A fiduciary bond is required by the court in order to protect the person for whom the fiduciary is acting, such as a ward or invalid. A fiduciary’s responsibilities could range from managing an estate to giving financial advice. A fiduciary bond is also known as a probate bond and may be one of many types: guardianship bonds, conservator bonds, administrator bonds, receiver bonds, executor bonds, and trustee bonds The application for a fiduciary bond is completed for the state in which the fiduciary is to carry out her duties. The fiduciary, as a part of the application, agrees to pay the amount of the bond purchased in case she fails to fully perform her duties. Once the application has been submitted to the court, the judge completes necessary sections after reviewing the application. If over 18 years of age, a person who has a fiduciary acting for him m
ERISA requires that a bond be established for most qualified plans for at least 10% of the current value of the plan assets. The minimum amount of the bond is the lesser of ten percent (10%) of the trust assets or $500,000. The amount of the bond is reported each year on the plan’s Form 5500, Schedule H for large plans and Schedule I for small plans. Prior to April 17, 2001, small retirement plans (those with fewer that 100 participants) were exempt from engaging a Certified Public Accountant to audit the plans assets. Large plans have always been subject to this requirement. The Department of Labor recently issued new rules and regulations to increase the security of assets in small retirement plans. These regulations attempt to limit fraud and to provide participants with more information to monitor plan assets and fiduciaries. The new rules do not change the existing requirement of a fiduciary bond for up to 10% of the value of plan assets. Plans that cover only a sole proprietor an
A fiduciary bond is the same as a probate bond, executor bond, or an estate bond. It is a court ordered bond that promises the executor of the estate will correctly distribute the assets of the incapacitated or deceased. Current Market: Special Markets: Get a FREE quote on your Fiduciary Bond online now!
