Overview of VA Fiduciary Surety Bond Requirements
The VA fiduciary surety bond is actually a type of court bond. Typically, most non-family members that are fiduciaries of Veteran Affairs funds, are required to obtain this type of bond by the Department of Veteran Affairs. The bond is typically required for most funds over $20,000 that are being managed on behalf of veterans who cannot handle their benefits themselves.
The bond is put in place to guarantee the proper distribution and handling of funds, and to protect against fraud and dishonesty on the side of fiduciaries. If a fiduciary violates the conditions of the bond, by misappropriating or incorrectly distributing funds, a claim can be made against their bond. Claimants are those parties who have suffered harm and losses as a result of such actions.
If there is cause for a claim, the surety which issues and backs the VA fiduciary bond can compensate claimants for as much as the full bond amount, also known as the penal sum.
There are exemptions to the VA fiduciary bond requirement, including legally appointed fiduciaries, trust companies and other institutions with trust powers, and spouses of veterans who are unable to manage their benefits.
If you want to know more about how surety bonds work, have a look at our ‘What is a surety bond’ guide.
Keep reading to learn about the cost of your VA fiduciary surety bond, what can give rise to a bond claim, and how you can get bonded.
For any additional questions about the bonding requirements for VA fiduciaries call us at 866.450.3412. We’ll be happy to provide you with additional information.
VA Fiduciary Bond Cost
The cost of getting your VA fiduciary bond is a percentage of the full bond amount that’s determined by the VA Department. Typically, it’s equal to the funds of the beneficiary that are to be managed, plus the anticipated annual income in benefits from the VA Department.
Applicants for this bond will pay a small percentage of that total amount, which varies depending on the applicant. Credit score is the most important factor determining bond cost, so applicants with a high credit score (700 FICO or above) and positive personal financials can expect to be offered a rate as low as 2-5% of the total bond amount.
Want to know how much your bond will cost? Complete the bond application form and we will get back to you with a free, no-obligation quote.
Claims Against Your VA Fiduciary Bond
Claims against a fiduciary bond can arise in cases when bonded fiduciaries don’t execute their responsibilities as specified in the surety bond agreement and state regulations. This includes not distributing funds in a timely manner, not paying veterans’ taxes and bills, misappropriating or misdirecting funds, and more. In such cases, the VA Department can file a claim against the bond in order to secure compensation for the veterans who have been harmed as a result.
Bond claims can be very costly and difficult to handle, which is why they are best avoided. To avoid cause for a claim, fiduciaries should communicate with beneficiaries regularly to make sure they are handling their funds properly and in accordance with their wishes. The website of the Department of Veteran Affairs offers an extensive guide for VA fiduciaries to help them perform all their responsibilities according to legal requirements.
Fiduciaries should also communicate with their surety in cases that could give rise to a claim, in order to manage the situation and resolve it early.
Get Your VA Fiduciary Bond Today!
Getting your bond is easy. Apply by completing our simple bond application form. We’ll respond with a free quote on your bond, along with further details on completing your application.
Once your full application is received, your bond will be issued within two working days, and will be on its way to you via standard mail. We’ll also provide you with a digital copy of the bond, as soon as it is issued.
Call our bond professionals at 866.450.3412 if you have any questions about getting bonded or need help with your application. They will be happy to assist you!