Protecting the Vulnerable: Fiduciary Duties and Bonds Explained
When someone cannot make sound decisions for themselves, a court can appoint a fiduciary to do so. Often, courts require fiduciary bonds to protect “the ward.”
Safeguarding The Interests of Another
When a legal proceeding determines that someone cannot make sound decisions—whether due to age or mental incapacitation, the court can appoint a fiduciary—sometimes also called a conservator. This individual has important fiduciary duties to uphold in handling the affairs of the ward.
As Smart Asset describes:
Generally speaking, a fiduciary is an individual responsible for safeguarding the interest of another party. Fiduciaries may include trustees, guardians, financial professionals or another party with control over someone’s assets or property. Typically, a fiduciary will take control of someone’s assets when they are no longer able to manage them independently.
The law holds fiduciaries to high standards. That’s important because of the level of trust they are given. NOLO points out:
The fiduciary is in a unique position of trust. For example, a senior citizen with diminished abilities, or a young dependent child, must rely on the fiduciary to make sound decisions….In most situations, the individual who relies on the fiduciary isn’t in a position to recognize, let alone defend against, a failure of the fiduciary to live up to his duty. For this reason, the law will step in.
Example. When Henry stepped in to manage his elderly mother’s care and finances, he understood that he was responsible for making choices that were in her best interest. For instance, if his mother required in-home care, paying that expense by drawing on her retirement would likely be fine. By contrast, withdrawing funds to buy himself a new car, or to invest in a speculative shipwreck recovery business, would probably be a breach (violation) of his fiduciary duty.
Understanding Fiduciary Bonds
To guarantee the faithful performance of appointed fiduciaries, courts frequently require fiduciary bonds. Essentially, a fiduciary bond protects the ward, serving as a guarantee that the fiduciary will act in accordance with all applicable state laws. Depending on circumstances and region, fiduciary bonds can also be referred to as administrator, conservator, guardianship, probate or personal representative bonds.
As a leading national direct provider of all types of fiduciary bonds, Colonial Surety Company makes it easy for fiduciaries in every state to obtain their required bonds. At Colonial, the steps to obtaining these bonds are easy—get a quote online, fill out your information, and enter your payment method. Print or e-file the bond right from your home or office—even while at court. It’s that simple. Obtain a Fiduciary Bond Here!
Attorneys Are Invited To Gear Up for 2021
In addition to providing fiduciary bonds directly to the general public, Colonial Surety provides an innovative Partnership Account to help busy attorneys. This free business service provides attorneys with user-friendly client management dashboards to coordinate, view, complete and e-file the court and fiduciary bonds clients need.
Often, lawyers and their clients are left shuffling as they scurry to secure court bonds and respond to deadlines. Colonial’s direct, fully digital, user-friendly system reduces the time, hassle and expense typically associated with antiquated processes.
In preparation for a busy new year of work, attorneys can set up a free Colonial Surety Partnership Account® to streamline the bonding process. Our unique Partnership Account® will increase your efficiency—and lower costs for clients. See for yourself today: Colonial’s Partnership Account for Attorneys.
Founded in 1930, Colonial Surety Company is a direct seller and writer of surety bonds and insurance products. Colonial is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business across the USA.