Help Desk
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Court Bond
Some court proceedings require a bond in order to protect against financial loss for the party you are engaged against in court. Generically, court bond refers to any court ordered bond. There are many types of bonds with different underwriting criteria.
Types of Court Bond
- Appeal Bond: When a court makes a financial judgment and an appeal has been made, the court will order an appeal bond be in place to protect the original financial judgment. This is for two reasons. One to guarantee the awarded party payment if the appeal is lost, and two is to hopefully stop time wasting appeals. These bonds generally carry a 100% collateral requirement for non-account principles.
A safe rule, is when you are the defendant collateral is required, and when you are the plaintiff collateral may not be required. An Injunction is a good example of a plaintiff bond. This is where the court stops another from continuing an action in question.
- Custodial/Guardianship Bond: These bonds are required by the appointed guardian of an incapable persons assets. Often times you will see this when a minor's parent has passed and has left assets to the minor. The bond guarantees that the responsible party (new guardian or responsible adult / facilitator of the assets) will manage those assets in the minor's best interest until they are an adult. These bonds can also be used for any incapable situation. The physically or mentally challenged, elderly or other reason for a court to deem someone incapable of correctly managing their own assets are other cases when these bonds might be required.
- Probate/Executor Bond: Probate bonds are required by the person who has been charged with the distribution of assets of ones estate. There is an assumed fiduciary responsibility by the executor and this bond is to protect the estates assets from misuse.
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