The below questions are specifically related to applying, filing, and renewing a court bond. If you are unsure what a court bond is, please read our post “What is a Court Bond and How to get One” post, or check out our Court Bond Guide.
Applying for a Court Bond
Q: How long does it generally take to get a court bond?
A: The length of time to get a court bond varies depending on the type and complexity of the bond. Once the surety company receives a completed application and supporting court documents, they can work on getting a quote for the bond.
Once payment is received for the bond, the surety company can generally issue the bond that same day.
Q: Why did the surety ask for a co-signer on my court bond?
A: By having a qualified co-signer, the surety company feels more comfortable that it will be reimbursed if they payout on a bond claim. Asking for a co-signer is just an added level of protection for the surety. The surety might ask for a co-signer if they feel they need this added protection.
Q: What risk does the co-signer for my court bond have?
A: The co-signer takes on the financial risk of the bond just like you do. This means that if you do not follow through on your obligations and the surety pays out on a bond claim, they are going to turn to the principal and the co-signer for reimbursement.
Purchasing your Court Bond
Q: Why does my credit tie into my court bond cost?
A: To show that you can manage the role, you need to have a credit check. While there are many ways of showing that you are a good and responsible person, the credit report is a way for the surety company to look at past records of your behavior and ensure that you will manage another person’s finances appropriately.
Q: When is collateral required?
A: Collateral is almost always required with Judicial Bonds. By nature, Judicial Bonds are more hazardous than Fiduciary Bonds, so they often require collateral in the amount of the bond. This collateral is in addition to the bond premium.
Q: Why do I have to pay for the entire bond premium upfront?
A: When you become a fiduciary there is a process that you need to follow. You must pay the bond premium upfront in order to take on your duties. Until that time, you cannot manage the affairs of the estate or act on another individual’s behalf.
In some instances, individuals can be reimbursed for the bond premium out of the estate funds.
Q: If the estate value increases/decrease, do I need to increase/decrease my court bond?
A: If the size of an estate changes, you may be able to change the bond amount as well. This will involve contacting the court to evaluate the current condition of the estate. You will need to have the estate appraised by an independent third party.
If the change is small, it may not be worth pursuing. However, if your bond is up for renewal and the value of the estate has changed substantially, you may be able to reduce/increase the court bond.
Changing your bond amount will most likely result in a change in your bond premium.
Filing Your Court Bond
Q: What do I do with my court bond now that I have it?
A: Once you receive your court bond from the surety company, you will need to file it with the obligee. Most times, this is the court requesting the bond. You must file your bond with the obligee; the surety company will not file your bond for you.
Q: Do I have to file my original bond with the court?
A: Yes. Most courts require you to file the original bond with the wet seal and wet signature. Copies of the bond should be for your record only.
Claims on your Court Bond
Q: How does a claim on a court bond work?
A: You can learn about what happens if a claim is made on your bond.
Renewing your Court Bond
Q: When does the liability associated with my court bond end?
A: The liability associated with your court bond ends when the bond is exonerated, meaning when the court determines there is no longer a need for the bond.
Q: Does my court bond renew?
A: Yes, court bonds renew until the presiding court exonerates the bond. Exonerate means to “properly discharge” the bond.
Q: Why do insurance companies not like to replace existing court bonds?
A: Insurance companies don’t like to replace existing court bonds due to the liability. They don’t know how the previous person handled the estate. The insurance company doesn’t want to be liable for someone else’s decisions.