Yes, the person will always pay in the end.
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A fiduciary bond is a judicial bond that guarantees that a court-appointed fiduciary, an executor or guardian, performs all duties. It 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 may have the fiduciary bond requirement nullified through a waiver application.
The Employment Retirement Income Security Act (ERISA), passed by Congress in 1974, requires that anyone passing financial advice or responsible for retirement funds be considered as a fiduciary. The law also requires fidelity bonds and fiduciary liability insurance. The former, serving a purpose similar to that of a fiduciary bond, serves to protect the financial resource the fiduciary manages. The latter protects the fiduciary in cases involving misstatements, omissions, and errors on his part while conducting his duties.
Whether or not one is a fiduciary is determined by the amount of control or discretion she holds over the financial resource in question. Fiduciaries are subject to high standards of conduct because they act on behalf of others. If the fiduciary should wish to take leave of her responsibilities, she has to make sure that another fiduciary is able to take over her duties. In all, fiduciaries and the fiduciary bond serve to ensure that financial duties are conducted properly.
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