JUDICIAL AND COURT BONDS

In a civil proceeding, bonds are often required by the court, as they protect those involved in the proceedings and guarantee the bonded parties – either the plaintiff or defendant or both – will take action. Certain legislation, along with the court’s ruling, typically set the required dollar amount of these bonds. Court Bonds can generally be broken down into 2 distinct categories:

1. Civil Court Bonds – Required by the court at significant point in litigation process. It protects the opposing party from any loss suffered as a result of the court’s having temporarily granted the privilege.

2. Fiduciary Bonds (Probate Bonds) – Required by a court when an individual, or corporation are appointed in wills, deed of trust, guardians or conservators of minors or wards of the court to take control of the property and/or manage, transfer and distribute the assets in accordance with the court’s orders. These bonds guarantee that the interest of those concerned will be properly safeguarded.

The following are some of the most common types of Court Bonds:

• Appeal Bond – Is required to guarantee that the payment of the original judgment will be paid if the appeal fails. The appeal bond discourages people from time-wasting appeals.
• Bail Bond – Is posted to ensure a person in jail will appear in court after being released back into the public. If the accused person fails to do so, the bail money must be forfeited to the court.
• Custodian Bond (Guardianship Bond) – Ensures that an appointed custodian will correctly manage the finances of the individual. The terms “custodian bond” and “guardianship bond” are often used interchangeably.
• Executor Bond – Is also known as an estate bond or probate bond. Sometimes it’s referred to as “fiduciary bond.” They must be purchased by those responsible for distributing a person’s estate after they die. The probate bond protects the deceased’s assets.
• VA Fiduciary Bond – In 2011, the VA began allowing veterans’ friends and family members to act as fiduciaries, which gave those closest to veterans the ability to retain control of their finances, estates and benefits without having to pay the hefty fees charged by fiduciaries who work for the court.

What are some of the benefits of obtaining a court bond?

• Court requirement – In some instances, the courts will mandate that a bond be put in place before a court action can be pursued or postponed.
• Better than the cash alternative – Some courts, in lieu of a bond will take cash security. Therefore the principal, if they qualify for the bond will not have to use their cash reserves to post the security.
• Avoidance of bureaucratic management of security – In the event that the principal has the funds to post the security in lieu of the bond, it is not recommended, as those funds will now be in the management of the courts and when the case is resolve, it might be extremely burdensome to apply for those funds to be returned.