There is a multitude of reasons an individual, lawyer or institution may need a court bond. When legal oversight of a person, trust or estate is necessary, courts require a surety bond to protect those involved in the proceedings.
Protections are necessary to avoid possible loss from fraud, negligence or incompetence. For this reason, there is scrutiny of those in an oversight position. Bond companies require financial records and other background information from a bond holder prior to issuance. These bonds may also have a long lifespan, especially if the bond is for conservatorship. Therefore, review of financial records may be necessary when renewing a bond.
The most common court bonds are fiduciary bonds. Such bonds are used in legal proceedings where a person is given authority over someone else’s financial interests, assets and well being. Such participants include:
- Executor of a will in probate
- Legal guardian of a minor or elder
- Legal trustee or conservator of a trust or estate
In the case of probating a will, a bond is issued to protect heirs and creditors. The bond covers the administrator or executor that is named to execute the will. If the executor does not complete the probate process in a timely manner, makes errors or tries to circumvent the desires of the deceased, the bond will ensure no loss or harm results. The bond is in effect until the probate is completed, all monies are distributed and debts paid.
Legal guardian, trustee and conservator bonds operate in much the same way as an executor’s bond. The difference is the trustee must manage the finances and well being of a person for the extent of his or her life. A bond must be issued and renewed to offer continued protection for the person in question. Whether it is a minor child or an elder who is no longer able to manage his or her own affairs, the guardian must ensure that funds are properly managed and sufficient to care for the person. When a guardian is no longer willing or able to care for the individual then a new one must be named. A conservator, guardian or trustee could be a family member, lawyer, trust manager or other individual or institution.
Questions about court bonds? Have you been instructed by a court to obtain a bond? Whatever your bond need, contact South Coast Surety for assistance.