A type of surety bond, sometimes called a probate bond, it protects the resources a court-appointed fiduciary is managing for another person or company. Fiduciary examples may include executors or trustees. The bond guarantees the performance of the fiduciary's responsibilities, and protects the resources the fiduciary is managing and the party for whom the fiduciary is acting.
Such bonds would include: Bankruptcy Trustee Bonds, guardianship bonds, conservator bonds, administrator bonds, executor bonds, etc.
Application for a fiduciary bond is completed in the state in which the fiduciary will be carrying out the duties involved in managing the specified property. It is then submitted to the court system, and a judge reviews it, then assigns the fiduciary.
The Employment Retirement Income Security Act (ERISA) was passed by Congress in 1974 and demands that anyone offering financial advice or responsibility for another's retirement funds must be a court-appointed fiduciary. The law also requires the purchase of fidelity bonds and fiduciary liability insurance.
When employers offer retirement and benefit plans, they must meet ERISA regulations and must file plan descriptions and annual reports with the Department of Labor and the IRS. A copy of such plans must be provided for its employees.