• September 10, 2016

Avoiding Underwriting Red Flags in Fiduciary Bonds

Avoiding Underwriting Red Flags in Fiduciary Bonds

Avoiding Underwriting Red Flags in Fiduciary Bonds 1024 455 Patrick J. Thomas Agency

Fiduciary bonds can be tricky to obtain, and attorneys need to be prepared with the right knowledge and information before pursuing them. By researching and understanding the various underwriting red flags, you will give your client/s the best chance of success when obtaining fiduciary bonds such as:

Red Flags in Fiduciary Bond Underwriting

Just like insurance companies, bond companies employ teams of seasoned underwriters who help protect their interests by identifying poor or risky bond opportunities. They are there to identify any reason why their company should not provide you with a bond.

Many of these red flags are out of the direct control of most attorneys, but it’s still necessary to be prepared for these bumps in the approval process.

The most common red flags that fiduciary bond underwriters look for are:

  • Applicants who do not meet the qualifications to serve as the bond principal.
  • Fiduciaries who have excessive or long-term debts or other financial obligations.
  • Disputes between parties that are undergoing litigation.
  • Nominated fiduciary parties who do not have legal representation.
  • Bonds that are being requested for an estate that is currently in the process of being administered.
  • Fiduciaries who are running a business from within the estate.

These are things that attorneys should review with their clients to resolve before applying for a fiduciary bond.

Costly Mistakes Attorneys Make

Over the years, we have seen many attorneys fall into certain pitfalls such as waiting too long from the date of death and the appointment of the fiduciary. It is essential for attorneys to advise their clients to select a person to administer the estate as soon as possible, then act quickly to acquire the necessary and required fiduciary bonds.

To acquire fiduciary bonds quickly, attorneys need to help clients compile the necessary information and submit the required forms to a bonding company. To expedite this process, contact the Patrick J. Thomas Agency. We have a large network of surety providers and the experience and know-how to help you get the bond you need in less time and with a greater chance of getting approved quickly.

 

Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.