What are Court Bonds?
The term court bond can encompass many different aspects pertaining to the court system including words, phrases and bonds. Court bonds are a special kind of surety bond that judges may require during court proceedings. Like all other kinds of surety bonds, court bonds guarantee something. Court bonds generally guarantee that someone will do something or allocate money for the court. Some examples of types of court bonds are the Appeal Surety Bond, Administrator Surety Bond, Trustee Surety Bond and Cost Surety Bond. Court bonds can be broken down into two different types: judicial and fiduciary.
Judicial bonds are court bonds used in civil court cases pertaining to the court’s ruling. Judicial bonds generally protect against loss occurring because of a ruling, and because it is difficult to predict the ruling of a court, the underwriting process can be a bit rigorous. These bonds can be difficult to qualify for because of the unpredictability of courts.
An example of a judicial bond is a bail bond. Here at Surety1, we do not write bail bonds, but they are the most well known to the public. Bail bonds are judicial bonds because they guarantee that a jailed person will return to court for their scheduled hearings.
A critical aspect of understanding fiduciary bonds is knowing what a fiduciary is. A fiduciary is guards and handles assets or estates as the court assigns. So, a fiduciary bond guarantees that the fiduciary will responsibly and ethically handle assets assigned to them. Individuals appointed by a court to handle assets generally must post one of these bonds. This bond will cover the amount of assets the person is handling to ensure proper protection. It also helps ensure the person completes all assigned duties to the standard the court sets.
Different Kinds of Court Bonds
There are more court bonds than I can reasonably list here, so this list will cover a couple kinds of court bonds to give you a bit of an overview as to what they are and what they can encompass:
Administrator Surety Bond – Also know as Executor Surety Bonds, Administrator Surety Bonds are required by probate courts. Probate courts require this bond to protect of the administration of an estate, will or guardianship. The probate court determines the amount of this bond and ensures it is an adequate amount to fully protect the entirety of the estate in question.
Appeal Surety Bond – This bond is a judicial bond required when the plaintiff or defendant wants to appeal the case to a higher court, like an Appellate Court. The Appeal Surety Bond suspends any lower court decisions until another, higher court can hear arguments and come to a decision. This bond guarantees that money will be available to pay the original judgement and the appeal. This money will be available regardless of the success of the appeal. The appeal surety bond must cover the total amount of collateral to ensure compensation.
Cost Surety Bond – This is a type of judicial bond that ensures clerks are properly compensated certain court cases. Generally, the Cost Surety Bond is required for those with court cases outside their home state.
Guardian Surety Bond – This fiduciary bond is one that legal guardians must obtain to help ensure they handle finances do so properly. Guardians are often assigned to handle the finances of minors or disabled people, and this bond helps protect their interests. If the legal guardian assigned to them does not do the job correctly, the Guardian Surety Bond can allow for that person to be properly compensated.
Trustee Surety Bond – This fiduciary bond guarantees that trustees will behave in accordance with the court’s ruling. The Trustee Surety Bond protects a trust from loss because of the dishonest or unethical decisions of the trustee.