What is a VA fiduciary bond?
A VA fiduciary bond is often required of an individual tasked with managing someone’s Veterans Affairs benefits. This becomes necessary when veterans cannot manage their own benefits due to injury, disease, advanced age, or being under age 18. The Department of Veteran Affairs requires a fiduciary bond when managed funds exceed $20,000. The surety bond protects the veteran if the bondholder (benefits manager) mishandles funds or commits fraud.
What is a VA fiduciary?
The Veterans Benefits Administration may appoint a VA fiduciary to receive and manage funds on behalf of a beneficiary. The bond helps ensure that the fiduciary uses the funds for the beneficiary’s well-being (or their dependents’).Get Your VA Fiduciary Bond:
Quick Takeaways
- The Veterans Benefits Administration will appoint a VA fiduciary to receive and manage funds on behalf of a beneficiary.
- Typically, a VA fiduciary bond is required for those managing $20,000 or more of VA funds for a beneficiary.
- Exceptions to the bonding requirement may include spouses, trust companies, banks, and court-appointed fiduciaries.
- You must fulfill your VA fiduciary responsibilities to avoid bond claims.
Who needs this type of fiduciary bond?
If you’re appointed a VA fiduciary, the Veterans Administration may require you to obtain a surety bond. Typically, this is necessary if you manage $20,000 or more of VA funds for a beneficiary. Exceptions to the bonding requirement may include spouses, trust companies, banks, and court-appointed fiduciaries. Read the complete Guide for VA Fiduciaries to learn more. You can also check out the Rule by the Veterans Affairs Department, published in 2022.
How much does a VA fiduciary surety bond cost?
You will pay a small percentage of the bond amount the Department of Veteran Affairs requires, which depends on the value of the funds you manage. The total bond amount is the maximum amount you’ll be held liable for if you break your bond contract or fail to fulfill your fiduciary duties. The percentage you pay – called a premium – typically ranges from 1-5% of the bond amount. Typically, the better your credit score, the lower your bond rate. Your bond must remain active (renewed annually) for as long as you’re acting as a VA fiduciary.
Other Frequently Asked Questions
How do I become a VA fiduciary?
To become a VA fiduciary, the Department of Veteran Affairs typically seeks close relatives of the beneficiary. If they can’t find any, they may appoint a professional fiduciary to take on the role. If you’d like to apply to become a VA fiduciary, you can submit a request by reaching out to the “hub” nearest you. Include the beneficiary’s name, the VA file number, and your name and contact information. If you’re a professional fiduciary, you must send a cover letter and resume to VA_Fiduciary@va.gov and undergo a background check, credit check, and interviews before being selected.
Can I get this bond with bad credit?
If you have a low credit score, you may still be able to get a VA fiduciary bond. Contact ZipBonds if you’re worried about your ability to get bonded.
How do I avoid claims on my bond?
You must fulfill your VA fiduciary responsibilities to avoid bond claims. The Guide for VA Fiduciaries outlines specific information regarding your duties and requirements, including many commonly asked questions. You can also visit the U.S. Department of Veteran Affairs website for more information and important documents.
Apply for a Veterans Affairs Fiduciary Bond in Your State
To apply for your VA fiduciary surety bond, you must complete an application process, which includes submitting a credit release form, financial information, and your letter from the Department of Veteran Affairs. If you need help, don’t hesitate to call us at (888) 435-4191. We’ll help you get bonded in a zip!
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.