Some veterans require assistance to administer their Veteran’s Administration (VA) benefits. The fiduciary who provides that assistance has an important and sensitive job as the custodian of large sums of money that are critical to the veteran’s care and wellbeing. When VA benefits exceed $20,000, someone must obtain a VA fiduciary bond before they’re allowed to serve as a fiduciary. This is your comprehensive guide to those surety bonds.
What is a VA Fiduciary Bond?
In the simplest terms possible, a VA fiduciary bond is a way to ensure that anyone appointed to manage VA benefits acts according to the best interests of the veteran. A surety bond holds the fiduciary financially responsible if he steals or mismanages a veteran’s benefits in any way. The VA requires bonds both as a way to discourage a fiduciary from acting irresponsibly and as a way for veterans to seek justice in the form of compensation for whatever benefits they lost.
How Does a VA Fiduciary Surety Bond Work?
In the event that a fiduciary violates their responsibility to carefully manage a veteran’s benefits, that veteran (or someone acting on their behalf) may file a claim against the VA fiduciary surety bond seeking damages. The company that issues the surety bond (the surety) will then investigate the claim to prove whether or not it has merit. As long as all the details check out, the surety agrees to settle the claim – meaning pay it in full – using its own funds. In that way, bonds guarantee someone compensation for valid claims. However, surety bonds do not relieve a fiduciary of consequences for bad behavior. Just the opposite, in fact. The fiduciary who was required to obtain the surety bond in the first place is also required to settle any claims filed against that bond. If the surety pays instead, the bond holder must pay the surety back with interest and fees included in the debt.
Who Needs a VA Fiduciary Bond?
Anyone who intends to act as a fiduciary for a veteran with benefits larger than $20,000. The VA takes the surety bond requirement seriously and will not compromise under any circumstances. Since the VA won’t release essential benefits to someone without a bond, it’s important for a fiduciary to acquire a surety bond sooner rather than later to prevent unnecessary struggles for the veteran who requires those benefits. Work with Viking Bond Service to get a quote within 48 hours.
Why Do You Need a VA Fiduciary Bond?
Anyone who requires benefits and requires someone to manage those benefits is vulnerable by definition. That person is vulnerable to exploitation by others. They’re also vulnerable to all the consequences that could arise from loss of benefits. Knowing that, the VA created the bond requirement. By agreeing to get a surety bond and take financial responsibility for any claims, a fiduciary demonstrates their trustworthiness. They also commit to accountability – which is important because without a surety bond it might be impossible for a veteran to quickly or completely recover funds from a fraudulent fiduciary.
What Are the Requirements for a VA Fiduciary Bond?
To obtain a VA fiduciary surety bond, someone must go through the application process and find a surety willing to issue them a bond. A fiduciary is also required to keep that surety bond active for as long as that person administers VA benefits. Finally, a fiduciary must pay in full for any valid claims filed against the bond. It’s also important to know who isn’t required to obtain a surety bond to serve a fiduciary: spouses, a fiduciary appointed by the court, a trust company or bank with legal trust powers, or a fiduciary in a location outside the US – like Puerto Rico or Guam – where it’s harder to secure a bond.
How Much Does a VA Fiduciary Surety Bond Cost?
Surety bonds costs can vary since they have a specific value, meaning an amount the surety company is willing to pay out to settle claims. Typically, the amount of the bond corresponds to the amount of a veteran’s benefits so that victims can recoup their losses in full. Someone will pay a small percentage of the total amount to obtain a surety bond. People with a low credit score or history of financial difficulty may pay more, but they won’t necessarily be denied a surety bond outright.
How to Obtain a VA Fiduciary Bond
It’s a relatively straightforward process. Start by filling out an online surety bond application. It will ask for information about your background, business dealings, and financial standing. A surety may also need additional documentation to accurately understand your credit risk. You will then receive a quote for the premium, and after paying you will receive a document for the VA proving you have the required bond.
Viking Bond Service – Serving Veterans and Fiduciaries
If you’re required to get a VA fiduciary bond, make the process easy on yourself so that you can get busy serving a veteran in need. At Viking Bond Service, you can submit your bond application online. You can also get quality information directly from surety bond experts. Contact our team at 1-888-278-7389 or through the contact form on this page if you have questions about anything.