What Is a Fiduciary?
Fiduciaries are people who manage the assets or property of another person. Executors, Trustees, and Powers of Attorney are all considered to be fiduciaries and must act honorably and in accordance with the law. Fiduciaries must also act in the best interest of and in accordance with the terms of the trust or will.
What Is A Fiduciary Bond?
A fiduciary bond is a legal tool designed to protect beneficiaries, heirs, and creditors in the case of a breach of fiduciary duty or fiduciary negligence. A breach of fiduciary duty can occur when someone is not acting in the best interest of another party. The fiduciary may have acted inappropriately, mishandled, misappropriated assets, or caused assets to be lost or rundown through negligence. The fiduciary bond requires the guarantor to pay the court a certain amount if the fiduciary breaches his/her duty or are found negligent.
Do You Need A Fiduciary Bond?
State statutes determine when a bond is required, and if you are required to get bonded as a fiduciary, the court will notify you. Fiduciary Bonds may be requested by beneficiaries or creditors who are concerned about the reliability of the fiduciary. The fiduciary bond will ensure the fiduciary fulfill his/her duties and to further safeguard the assets of the trust, estate, or individual.
How Much Does a Fiduciary Bond Cost?
State laws determine the amount of the fiduciary bond and therefore they range in cost. The amount of the bond is set by the judge and is generally based on the value of the estate and other factors. The amount you pay to get the bond and maintain it, the annual premium, is usually based on a percentage of the bond amount. The amount of the premium is set by the bonding agency.
More Questions?
Parisi, Coan & Saccocio, PLLC, provides full-service handling of probate and estate administration to clients with estates $250k and up residing in New York. We also serve out-of-state heirs who have been appointed as representatives of large New York estates. For a free consultation call us at (914) 228-7448 or visit our Estate and Trust Administration site page for more information about our administration services.