As an attorney, you or your client may be called upon to act as a Fiduciary. A Fiduciary is one who, under the jurisdiction and supervision of a Court, administers property held in trust. The Fiduciary is generally required by law to provide a Surety Bond. This guarantees faithful performance and compliance with Court Orders.
The most common Fiduciary Bonds are:
• Administrator/Executor/Trustee of Estates
• Conservator or Committee of Incompetent
• Plan Administrator or Disbursing Agent
• Receiver of Rents
• Trustee, Operatingr Trustee or Trustee in Bankruptcy
A Surety Bond does not serve as coverage for the Fiduciary, but rather as protection for the heirs, incompetent, creditors, etc. Fiduciary bonds are of indefinite duration, and depending on the nature of the Surety Bond, it is cancelable upon either or all of the following:
• Court Order
• Distribution of Assets
• Filing of a Final Accounting
• Payment of Debts
• Sworn Affidavits by all interested parties
Acceptance is determined by the experience and integrity of the Fiduciary, personal and financial background, relationship of the trust and the type of assets involved. In the case where the Fiduciary is neither an attorney nor has sufficient experience or financial resources, a method of joint control may be used. This would require that all or most checks are either countersigned by the Surety or the attorney representing the Fiduciary.