In Kentucky, whenever a person is to act as a fiduciary, the court making the appointment is required to set a bond to protect the interests of those individuals who are to financially benefit from the case or the matter at hand. The bond essentially serves as a legal tool to make the fiduciary accountable for the improper or unlawful handling of another's assets. The amount of the bond normally reflects the total value of the estate being controlled.
As an additional requirement, every bond must be backed or guaranteed by surety, which is typically provided by corporate insurance policy issued at the time of appointment. It should be mentioned that not every person seeking to be covered by a corporate surety bond is approved as a background credit check is most always required to assure that the fiduciary is worthy of being insured. However, corporate surety may be waived by the instrument nominating the fiduciary (i.e., a Last Will and Testament) or in writing by all interested parties or when the person serving as fiduciary is also the sole beneficiary of the estate.
To document the bond and its amount, a fiduciary (and his corporate surety, if necessary) is required to sign and file an official form in the case or matter pending before the court. When the proceeding concludes and the papers filed adequately reflect that the assets have been distributed appropriately, then an order may be signed closing the administration and releasing the fiduciary from the bond.
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