VA Fiduciary Surety Bond

Managing funds above $20,000 may require that you post this type of bond. However, there are a few exemptions:

• Spouses of veterans
• Court appointed fiduciaries
• Trust companies and banks with trust powers
• Fiduciaries from locations which preclude bonding

The Department of Veteran Affairs will determine the total amount of your bond, i.e. your maximum liability under its term. Typically, it’s estimated as the total sum of the funds managed plus the anticipated net income (from VA benefits) for the ensuing accounting period.

You will only have to pay a percentage of that total bond amount, known as a premium. Your premium will depend on a number of factors such as your credit score, credit report, financial statements as well as the court documents regarding your application as a fiduciary. Rates may vary, but annual premium typical ranges between 2-5% of the bond amount. While most bond companies require strong personal credit in order to approve an applicant, there are some markets currently willing to offer terms of approval to applicants with bad credit. You can learn more on our surety bond cost page.

The good news is that you can deduct your bond premium from the assets of the beneficiary. You are expected to make premium payments periodically for as long as you continue to exercise your fiduciary rights. The Department of Veteran Affairs will regularly check your bonding status with your surety bonds company, so you must stay compliant.

The application process is simple, and we’ll help you throughout every step. All you have to do is complete our VA Fiduciary Bond Application and submit the following documentation:

• Personal Financial Statement
• Credit Release Form
• Letter from the Department of Veteran Affairs

You can find all the necessary forms along with more instructions on our VA fiduciary bonds application page.

The jobs of a VA fiduciary comes with a number of responsibilities. You must be thoroughly acquainted with them in order to avoid unwanted costly claims.

The Guide for VA Fiduciaries contains relevant and detailed information on what you are allowed to do with the beneficiary’s funds, and what other responsibilities you have. You must be in frequent contact with the beneficiary and ensure that you operate their funds in accordance with their wishes and needs.

Funds must be direct-deposited into a bank account of a federally insured bank or credit union, and can be invested only in U.S. Savings Bonds or dividend-paying accounts which are insured under Federal law.

You also have certain responsibilities to the VA, which are outlined on their website.

Usually, the Department of Veteran Affairs will look for any close relatives willing to serve as fiduciaries. However, in certain cases, when such a person cannot be found, they will look for a professional fiduciaries.

Professional fiduciaries must send a cover letter and a resume to: [email protected], including their name and mailing address. The selection process is rigorous and includes a background check, a review of your credit report as well as interview with a VA representative and an interview with character witnesses.