Frequently Asked Questions
We get lots of questions. Here are timely answers.
Your Questions Answered in Our Frequently Asked Questions.
Q. What is a fiduciary bond?
A fiduciary bond is a guarantee of performance. It ensures the fiduciary such as an Executor, Administrator, Trustee, Conservator or Guardian will perform their duties faithfully, ethically, and according to state law. The bond provides financial protection for the beneficiaries or heirs of an estate.
Q. Why am I required to obtain a fiduciary bond?
In Virginia, obtaining a surety bond is often required by the court as a condition for the fiduciary to be appointed as Executor, Administrator, Trustee, Conservator or Guardian. The bond is mandated by the court ensuring the estate is managed honestly and responsibly.
Q. Other than guaranteeing my performance, what else does the surety bond do?
The surety bond provides third-party indemnification. It protects the interests of any individual or entity that may have a financial claim on an estate (such as a beneficiary or creditor) whose interests are directly affected by the performance of the fiduciary. An incapacitated person or minor’s assets are also protected by the existence of a bond. Lastly, the bond indemnifies the Commonwealth of Virginia from potential litigation by transferring risk to a private entity.
Q. I received approval of my final accounting. Will the bond automatically be cancelled?
The court may or may not notify our office of the resolution of an estate, trust, or guardianship. It depends on the jurisdiction. To expedite the bond-release process, contact our agency once you have been notified of the approval of the final accounting by the Commissioner of Accounts. Be prepared to transmit a copy of the final accounting approval letter to our office via email or regular mail.
Q. I anticipate filing the final accounting soon, but there is renewal premium due on the bond. What should I do?
If a renewal premium is due prior to submission of the final accounting, the premium should be remitted due to the court mandate that all bonds remain in effect until the Commissioner of Accounts approves the final accounting.
There can be a period of several months between submission and approval of the final accounting, particularly if there’s a need for further information requested by the Commissioner.
Keep in mind that renewal premiums are pro-rated and unearned portions are returned to the estate in the form of a refund following the approval of the final accounting. If a renewal premium notice arrives after submission of the final accounting and prior to approval by the Commissioner of Accounts, contact our agency for instructions.
Q. The estate is closed via approval of the final account and suddenly I receive a check for refund of unearned bond premium. What do I do with the refund check?
As the fiduciary of the estate, you should handle the bond refund check in the same manner that you distributed the other assets of the estate.