What Is a Life Underwriter Training Council Fellow (LUTCF)?

Underwriters' meetingNew insurance agents can get a grounding in the basic skills, such as underwriting, needed to succeed in the field by becoming a Life Underwriter Training Council Fellow (LUTCF). After completing the required training, agents will have greater expertise in prospecting, selling, practice management as well as insight into practice specialties including life and health insurance, employee benefits and annuities. Having a LUTCF also can aid new agents in acquiring a job with an agency and in marketing themselves to prospective clients.

The LUTCF is overseen by the National Association of Insurance and Financial Advisors (NAIFA). The training and testing are provided by education company Kaplan through its College for Financial Planning division.

LUTCF Certification Requirements

The core of the certification requirements for the LUTCF is a set of three courses. Each course consists of eight weeks of instruction followed by a week for review and testing.

The first course is an introduction to life insurance and managing a life insurance practice. It covers business planning, ethics, life insurance product basics, risk management, prospecting, selling skills and financial planning.

The second course goes deeper into life insurance as well as annuities, mutual funds and insurance for health, disability, long-term care, group coverage and property and casualty. Risk management, retirement and estate planning are among the subjects covered in the third course.

The third course deals with risk management applications. It covers retirement and estate planning as well as special situations.

The courses are available as self-paced prerecorded lectures. They are also taught live and via interactive online classes. After completing each of the three courses, students must pass a two-hour test. To pass, they must correctly answer 70% of the 50 questions on each test.

The training costs $950 per course for a total of $2,850. The only prerequisite for the LUTCF is to belong to NAIFA, which has a sliding membership fee scale. People in their first year in financial services pay $10 to belong to NAIFA. The fee increases annually until it reaches $56 a year after a member has five years of experience in the field.

After receiving the designation, LUTCF designees can renew it by paying a $50 renewal fee every two years. As part of the renewal process, they also have to demonstrate that they have completed three hours of ethics continuing education every two years. In addition, LUTCF holders must agree to follow standards of professional conduct and be subject to a disciplinary process.

LUTCF Holder Jobs

Insurance worksheetsLUTCF seekers are usually insurance agents at the start of their careers. They may be interested in obtaining the designation as a way to convince potential employers of their commitment and knowledge about the life insurance industry. Having the LUTCF initials on a business card is also seen as an aid in marketing to prospects. The LUTCF is an optional certification and does not confer any specific powers or privileges on holders.

The designation has been around since 1984 and approximately 70,000 people have earned an LUTCF during that time.

Comparable Certifications

There are only a few entry-level certificates available to life insurance agents. In addition to the LUTCF, new agents can choose from:

Financial Services Certified Professional (FSCP) is offered by the American College of Financial Services, which originally co-sponsored the LUTCF with NAIFA. In 2013 the organizations ended their association and the American College of Financial Service began offering the FSCP. It requires passing seven courses on financial services and ethics topics at a combined cost of $3,230.

Registered Financial Associate (RFA) is a designation from the International Association of Registered Financial Consultants. It is offered to agents and other financial professionals who have already received a life insurance license, Series 65 securities license, bachelor degree in a related field or any of a number of professional designations, including a LUTCF. RFAs also have to pay a $250 fee. The only requirement other than that is to pass an examination on the organization’s code of ethics for financial professionals.

Bottom Line

Business meeting

The Life Underwriter Training Council Fellow (LUTCF) certification is one of the first designations sought by beginning life insurance agents. To get one, students have to learn about life and other forms of insurance, mutual funds, annuities, employee benefits and financial advising, in addition to managing a life insurance business, prospecting and selling.

Tips on Insurance

  • A consumer considering purchasing life insurance can increase the chances of making a good decision by having a relationship with a trusted and experienced financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • Entry-level designations for financial services professionals like the LUTCF indicate that an advisor is interested in learning about the field and following best practices. More advanced certifications such as Chartered Life Underwriter and Certified Financial Planner are likely to indicate that a professional is a more experienced and well-informed source for financial advice.

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6 Top Robo-Advisers for Investing

Getting started on retirement saving can be daunting when there are so many confusing options. There are thousands of stocks, not to mention other complex-sounding things to buy: bonds, mutual funds, exchange-traded funds, futures. And when you start reading about them, you’re liable to run into an impenetrable wall of investment jargon. So do you go it alone, taking shots in the dark with your…

Source: moneytalksnews.com

Common Mistakes That Lead to a Lower Credit Score

Getting a loan or a new line of credit is usually subject to a 3 digit-number known as the credit score. And although it is not the only indicator used by banks and other lenders, your score weighs heavily on your financial health. So, what are the common mistakes that lead to lower credit score […]

The post Common Mistakes That Lead to a Lower Credit Score appeared first on Credit Absolute.

Source: creditabsolute.com

Accredited Asset Management Specialist (AAMS)

What is the AAMS certification?New financial advisors need something to help them stand out. Consequently, the AAMS does just that. Designed for newcomers to the financial advice business, the AAMS trains advisors to identify investment opportunities as well as help clients with other financial goals. It also gives more experienced advisors a fast and simple way to learn more about asset management and improve their credentials. Here’s how it works.

AAMS Defined

An Accredited Asset Management Specialist (AAMS) can advise clients on college savings, taxes, and retirement savings. The course and tests for this certification are designed to ensure advisors can assist clients with their complete financial needs. It emphasizes evaluating the client’s assets and making appropriate recommendations.

The AAMS certification is granted by the College for Financial Planning, a unit of the Kaplan Company. The college oversees a large number of financial certification programs, including the Certified Financial Planner designation, one of the most valued certifications in the field.

AAMS Certification Requirements

What is the AAMS certification?

To receive an AAMS, students first have to complete a 10-module education program provided by the College for Financial Planning. Then they have to pass an examination. Finally, they must agree to abide by a code of ethics and promise to continue their education.

The courses are online and can be delivered in self-study or instructor-led formats. Courses are open-enrollment, therefore students can begin at any time without waiting for the next session.  The 10 modules cover the following material:

1.:The Asset Management Process

2. Risk, Return & Investment Performance

3. Asset Allocation & Selection

4. Investment Strategies

5. Taxation of Investments

6. Investing for Retirement

7. Deferred Compensation and Other Benefit Plans

8. Insurance Products for Investment Clients

9. Estate Planning for Investment Clients

10. Fiduciary, Ethical, and Regulatory Issues for Advisors

The College of Financial Planning provides everything necessary to study for and complete the modules and take the test. Students have access to the study materials and tests through an online portal.

Streaming video lectures, audio files, and interactive quizzes also can be found through the college’s site. Meanwhile, students can access live classes online and contact professors with questions and issues.

The AAMS Test

To get the AAMS certification, students have to pass just one test. However, they have to make their first attempt at the test within six months of enrollment and pass it within a year.

The fee for the first attempt at taking the test is included in the course tuition. There are no prerequisites for signing up to take the AAMS course.

Time and Money Requirement

Tuition for the AAMS courses is $1,300. This includes the fee for the first attempt at passing the certification exam. It also includes all needed course materials. Each additional attempt costs $100.

Students employed with certain financial services firms may be able to get tuition discounts. The college may also provide scholarships.

The College for Financial Planning recommends students plan to spend 80 hours to 100 hours on the course. Since the course is self-study, this amount of time is flexible.

To maintain AAMS certification students have to commit to completing 16 continuing education credits every two years. Also, continuing education has to cover one or more of the topics covered in the AAMS coursework.

AAMS certificate holders also have to agree to follow a professional standard of conduct. As a result, they have to maintain integrity, objectivity, competency, confidentiality and professionalism in providing financial services.

AAMS Certificate Holder Jobs

AAMS certificates are generally earned by entry-level workers in the financial advice business. Consequently, AAMS holders are typically trainees. In some cases, they may provide support services to more experienced and highly credentialed advisors.

The AAMS designation does not confer any special powers or privileges. Instead, it’s an optional credential that students may obtain to advance their careers and enhance their knowledge of financial advice.

Comparable Certifications

What is the AAMS certification?

In addition to the AAMS, the College for Financial Planning offers an Accredited Wealth Manager Advisor (AWMA) certificate. This is a somewhat more advanced designation. As a result, it requires a course equivalent to three graduate level college credits and requires 90 hours to 135 hours to complete.

Chartered Mutual Fund Counselor (CMFC) is sponsored by the Investment Company Institute along with the College of Financial Planning. It is similar to the AAMS certificate except it focuses on mutual fund assets.

Accredited Financial Counselor (AFC) is a general personal finance advice certificate from the Association for Financial Counseling and Planning Education. First, it requires 1,000 hours of financial counseling experience. Secondly, it demands three letters of reference. Finally, applicants must both complete coursework and pass an exam.

Bottom Line

The AAMS designation is usually for newly minted financial advisors, but even experienced pros can use it to bulk up their credentials. The courses and tests associated with the AAMS teach advisors how to evaluate assets and make recommendations.

While this certification doesn’t give an advisor any real powers, it’s a sign that they can identify investment opportunities specific to their clients. Above all else, it can be a great relief to a client who has a child going to college or a retirement house on their wish list. As a result of obtaining an AAMS, and advisor can point them toward the right investments for their goals.

Investing Tips

  • If you’re looking to identify investment opportunities, consider using an AAMS as your advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • An AAMS can help you with college savings, taxes, and retirement savings if you know what your goals are. However, if you are unsure how much you want to invest, what your risk tolerance is, or how inflation and capital gains tax will affect your investment, SmartAsset’s investing guide can help you take the first steps.

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Understanding Cash in Lieu of Fractional Shares

Woman on laptop

It’s not uncommon for publicly-traded companies to restructure based on changing market conditions or share prices. When companies merge, split their stock, or acquire competitors, it can raise the question of how to consolidate or restructure the company’s stock.

If such a corporate action generates fractional shares, the company’s leadership has a few options for how to proceed: They could distribute the fractional shares, round up to the nearest whole share, or pay cash in lieu of fractional shares.

What is Cash In Lieu?

stock price, or both.

There are several company events that can lead to investors receiving cash in lieu of fractional shares.

Stock Split

A stock split occurs when a company’s board of directors determines that their company’s strongly performing stock price may be too high for new investors. To make the stock price look more attractive to more investors and gain more liquidity and marketability, a stock split is executed to artificially lower the stock’s price by issuing more shares at a fixed ratio while maintaining the company’s unchanged value.

Depending on the predetermined ratio, a stock split could cause fractional shares to be generated. For example, a three-for-two stock split of a stock worth $111 would create three shares for every two shares each investor holds. Thus, a stock split would cause any investor with an odd number of shares to receive a fractional share.

However, if the company’s board isn’t keen to hold or deal with fractional shares, they will distribute investors’ whole shares and liquidate the uneven remainders, thus paying investors cash in lieu of fractional shares. The ratio or cash rate as set by the company performing the stock split can be located on the company’s corresponding SEC 8-K document.

reverse stock split because a stock’s prices are too low and they want to artificially raise them. If stock prices get too low, investors may become fearful to buy and the stock risks being delisted from exchanges.

When a stock undergoes a reverse stock split, each share is converted into a fraction of a share but higher-priced shares are issued to investors according to the reverse split ratio . For example, a stock valued at $3.50 may undergo a reverse one-for-10 stock split. Every 10 shares is converted into one new share valued at $35.00. Investors who own 33 shares or any number indivisible by 10 would receive fractional shares unless the company decides to issue cash in lieu of fractional shares.

Companies may notify their shareholders of an impending reverse stock split on Forms 8-K, 10-Q, or 10-K as well as any settlement details if necessary.

Merger or Acquisition

Company mergers and acquisitions (M&As) can also create fractional shares. When companies combine or are absorbed, they combine new common stock using a predetermined ratio, which often results in fractional shares for investors in all involved companies.

In these cases, it’s rare for the ratio of new shares received to be a whole number. Companies may opt to return whole shares to investors, sell fractional shares, and disburse cash in lieu to investors.

Spinoff

If an investor owns shares of a company that spins off part of the business as a new entity with a separately-traded stock, shareholders of the original company may receive a fixed amount of shares of the new company for every share of the existing company held.

How Is Cash in Lieu of Fractional Shares Taxed?

Just like many other forms of investment profits, cash in lieu of fractional shares is taxable , even though it was acquired without the investor’s endorsement or action. The stock’s company may send investors a check followed by an IRS Form 1099-B at year-end with a “cash in lieu” or “CIL” notation.

Some investors may simply report the payment on the IRS Form 1040’s Schedule D as sales proceeds with zero cost and pay capital gains tax on the entire cash settlement. However, the more accurate and tax-advantageous method would apply the adjusted cost basis to the fractional shares and pay capital gains tax only on the net gain.

Looking to Trade Fractional Shares?
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How to Report Cash in Lieu of Fractional Shares

Calculating the cost basis for cash in lieu of fractional shares is a little tricky due to the change of share price and quantity. The new stock issued is not taxable nor does the cost basis change, but the per-share basis does.
Consider the following example:

•  An investor owns 15 shares of Company X worth $10.00 per share ($150 value).
•  Investor’s 15 shares have a $7.00 per share cost basis ($105 total cost basis).
•  Company X declares a 1.5 stock split.

The investor is entitled to 22.5 shares valued at $6.67 each but the company states they will only issue whole shares. Therefore, the investor receives 22 shares plus a $2.73 cash in lieu payment for the half share.

The investor’s total cost basis remains the same, less the cash in lieu of the fractional shares. However, the adjusted cost basis now factors in 22 shares instead of 15, equaling a $4.66 per share cost basis and a $2.33 fractional share cost basis. Finally, the taxable “net gain” for the cash payment received in lieu of fractional shares equates to $2.725 – $2.33 = $0.39.

The Takeaway

It’s not always possible to anticipate a company being restructured and how it will affect shareholders’ stock. In the event the company doesn’t wish to deal with fractional shares, it’s important for shareholders to understand the alternatives such as cash in lieu of fractional shares, and how it affects them. While cash in lieu can be burdensome, investors can be made whole and can then proceed on their own accord.

There are many reasons investors consider fractional shares worth buying to add to their investment portfolio. For individuals looking to invest in fractional shares with the help of a simple account setup and no fees, SoFi Invest® can help.

Find out how SoFi Invest can help you reach your financial goals.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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10 Things to Know About Living in Salt Lake City

When you think of big cities, Los Angeles, Chicago or New York likely come to mind. Salt Lake City — the capital of Utah — isn’t the most frequently talked about “big city” in the country. That being said, it is up and coming and has a lot to offer those who are considering making the move.

While Utah is a predominantly conservative state with a strong religious culture, it offers a wide mix of neighborhoods. The charming neighborhoods scattered throughout the city are full of boutiques, small businesses and appealing restaurants that will make you want to eat out every meal.

Salt Lake City also has many schools — elementary through college and university — for people who are looking for a great education for their children or themselves. The city is also becoming more popular thanks to Silicon Slopes, the tech hub just south of the city center. The cost of living in Salt Lake City is relatively inexpensive when compared to larger cities, too.

There are always pros and cons when moving to a new city. Here are 10 things to know about living in Salt Lake City before you make your decision about moving to the Beehive State.

1. The weather can change quickly

Salt Lake City experiences all four seasons. People who live here often joke that the weather changes every 20 minutes. It can be freezing and snowing in the morning and then hot by noon. Some of the ski resorts have even been open on the Fourth of July! People can ski in the morning and spend the afternoon soaking by the pool.

Each season offers something truly fantastic for residents of Salt Lake. The winters are filled with crisp, white snow and brisk air. Fall is perfect for light jacket weather, and the changing leaves are spectacular in every canyon. Spring welcomes a much-needed break from the cold with perfect temperatures and beautiful blooming flowers. The summer comes all at once, hot and blistering making you long for the cold winter days. But no matter the season, S.L.C. is always beautiful.

salt lake city

2. It’s cheaper than other big cities

Compared to large, metro cities across the nation, the cost of living in Salt Lake is relatively inexpensive. The average rate for rent of a one-bedroom apartment dropped 11 percent between 2019 and 2020. Here’s a quick look at 2020 apartment costs in S.L.C.:

  • Studio apartment: $1,129
  • One-bedroom apartment: $1,245
  • Two-bedroom apartment: $1,565

Other utilities and expenses, such as food, gas and groceries, are all reasonably priced in Salt Lake City, too.

3. It’s not all Mormon (but there is a lot)

To understand the culture of Salt Lake City and Utah, you have to know a little about its history. In the year 1847, a group of Mormon pioneers trekked to Utah pulling wagons and handcarts and settled in the valley. For the next several decades, many more wagons full of Mormons followed as they escaped religious persecution back East. Because of this, the majority of residents in Utah are Mormon or have a family history rooted to the LDS church.

That being said, there are still plenty of other religions in the state. Salt Lake City is an ever-changing place with hip, up-and-coming liberal areas, such as Sugar House and nearby resorts like Park City. The city has also recently been named one of the best places for millennials in the country.

Conservative or not, there’s a spot for you in Salt Lake City.

4. There’s a real food scene

Green Jell-O may be the first thing that comes to mind when you think about the food in Salt Lake City. However, Salt Lake City boasts a diverse restaurant scene. You can find anything from Mexican food to French bakeries to authentic Japanese food within a block from each other.

Restaurants like Sapa in downtown Salt Lake put a modern twist on Japanese favorites. If you’re in the mood for a café where you can sit down, drink coffee and pretend you’re in Paris, try Eva’s Bakery located on Main Street in the heart of the city. Their pastries never disappoint. Or, try the nationally acclaimed Mexican restaurant Red Iguana.

Utah also has food that can’t be found anywhere else, such as fry sauce. The delicious blend of ketchup and mayo is the perfect fry accessory and will leave you wondering why you can’t find it elsewhere.

5. “The best snow on earth”

When driving through S.L.C., you’ll probably stumble upon a license plate that reads “The Best Snow on Earth.” That’s because, among other things, Utah is known for its incredible mountains and ski resorts. Every year, the mountains get an abundance of powdery snow. According to Ski Utah, the Utah Cottonwood Canyons are one of the snowiest places on earth. The weather and climate in Utah create the perfect powder that makes your skis glide down the mountain flawlessly.

One of the best things about skiing in Utah is that the resorts are all relatively close to Salt Lake City, and there are a lot to choose from. Places like Deer Valley Ski Resort bring in people from all over the world — this was one of the ski resorts that hosted the 2002 Winter Olympics.

Although this particular resort doesn’t allow snowboarders, there are plenty of other resorts that do, like Brighton. Ski season can last anywhere from November to late April and sometimes even longer. If you like outdoor activities in the winter, you’ll love living in Salt Lake City.

utah skiing

6. The mountains are also great in the summer

When people aren’t skiing the mountains, they’re hiking them as Salt Lake City is close to a lot of trails — give or take 30 minutes from the city center to the top of the canyon and trailheads. There are moderate trails, such as Neffs Canyon, that are dog friendly to more difficult trails like Mount Olympus. These trails make for a great way to spend your spring afternoon. Hike in the morning and watch the sunrise — or midday and take a second to enjoy the view.

7. The sports scene is underrated

Utah’s sports scene includes some professional teams, several minor league outfits and colleges to support. In the heart of downtown Salt Lake City is the Jazz — the state’s NBA team. Catch a game during the season and watch stars like Donovan Mitchell and Rudy Gobert in action.

If basketball isn’t your thing, check out a soccer match and cheer on Real Salt Lake. Other sports teams native to Utah are the baseball team, The Bees, and the hockey team, The Grizzlies. You can also check out a rivalry game between BYU and Utah during college football season. No matter your sport of choice, you can enjoy a hot dog and churro and cheer on your sports team.

8. Transportation and traffic isn’t that bad … usually

Traffic in Salt Lake is moderate. There are, of course, areas that see heavier traffic, especially if you’re heading southbound out of S.L.C., but on the whole, it’s not that bad. The streets in Salt Lake feel massive compared to other cities around the world. When Salt Lake was built, the roads had to be big enough that a wagon being pulled by ox could make a full U-turn. The city’s grid-like roads enable drivers to get around the city without confusion.

9. The air quality is surprisingly not great

One of the major cons of living in Salt Lake City is air quality. According to IQAir, S.L.C. has some of the worst air quality in the country. Part of the reason is its location in a valley that traps the pollution, making it difficult to cycle in new, clean air. Winter is the worst season for air pollution in the city, but the pollution fluctuates year-round.

salt lake city tourist attractions

10. The city is full of must-see places

Living in Salt Lake City gives you the advantage to see all that the state has to offer. In the winter, no matter your religious or spiritual beliefs, the Temple Square Christmas lights are a must-see. They bring to life the twinkle and magic that is the holiday season.

Park City is also a beautiful place to escape from the city during the winter. During the Sundance Film Festival, you might even spot a celebrity or 10. Southern Utah is also a must-visit. Utah has five national parks within a three- to four-hour drive from the city center — places like Zion, Bryce Canyon and Moab offer breathtaking views and scenery that just can’t be duplicated.

Living in Salt Lake City

There are so many pros to picking Salt Lake City as your place of residence. From all the outdoor activities to the diverse food scene, there’s something for everyone in Salt Lake City. You’ll enjoy the four seasons, the people and the opportunities that are present for everyone here.

Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory of one-bedroom apartments. Data was pulled in November 2020 and goes back for one year. We use a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

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Fiduciary Bonds: Definition, Types, Costs

Couple considers a fiduciary bond

A fiduciary bond, otherwise known as a probate bond, is a protective court bond that ensures a fiduciary will honor the expectations placed on them according to the law. The fiduciary bond upholds the interests and protection of the estate or trust owner. To understand who needs a fiduciary bond, how it works and the costs involved, here’s what you need to know.

What Is a Fiduciary Bond?

Fiduciary bonds are legal instruments that act as insurance to protect heirs, beneficiaries or other creditors when a fiduciary commits acts of fraud, embezzlement or other forms of dishonesty. To prevent damage, as a result, the court may require anyone with a fiduciary responsibility to another party to get a fiduciary bond.

Generally speaking, a fiduciary is an individual responsible for safeguarding the interest of another party. Fiduciaries may include trustees, guardians, financial professionals or another party with control over someone’s assets or property. Typically, a fiduciary will take control of someone’s assets when they are no longer able to manage them independently.

For example, a will may name a fiduciary to maintain the decedent’s assets. However, in the absence of a will, the spouse or children may take control, followed by relatives.

A fiduciary bond can range in price and ultimately depends on the value of the estate, as well as a few other factors. It may only be required to pay a portion to fund the bond, rather than the entire amount. For instance, if the fiduciary bond is $100,000, you may only need to pay about $400 to $600, depending on whether you receive approval.

Example of a Fiduciary Bond

Let’s say that John Smith is an elderly man who can no longer manage his property and assets. He didn’t appoint anyone to manage his finances, so the court appoints his daughter, Sally, to manage them in his place. To protect these assets, she may need to secure a fiduciary bond to guarantee she will meet her role’s duties and responsibilities.

The bond will help ensure that Sally won’t sell her father’s estate or embezzle money from him. If someone thinks Sally is not fulfilling the role of a fiduciary, they can make a claim against her. The company that issued the bond will then step in and fulfill the claim.

The company would likely reimburse John Smith for any money lost and then pursue Sally for the reimbursement of funds. If Sally no longer wants to be the estate’s fiduciary, she must find a suitable replacement and get approval from the court to resign. Until she does so, she is accountable for the duties and responsibilities of the fiduciary.

Who Needs a Fiduciary Bond?

A fiduciary bond isn’t always required. If it is mandatory, the fiduciary will receive a notification from the court.

In some cases, beneficiaries or creditors may request a fiduciary bond if they have concerns about the integrity of the fiduciary.

Usually, when banks, trusts or other corporate fiduciaries are in the mix, the courts don’t require a fiduciary bond. This is because there is less of a risk that a corporate fiduciary will compromise the payout.

Fiduciary Bond Types, Costs

Some of the common types of fiduciary bonds include:

  • Personal Representative Bond – This bond reassures the parties invested and connected to an estate that the fiduciary will manage the estate affairs in a responsible and ethical manner. The latter will also comply with local, state and federal laws and duties.
  • Executor Bond – This bond reassures the beneficiaries of an estate that even if the fiduciary doesn’t fulfill their duties, the bond will protect them and they will also receive compensation.
  • Guardianship Bond – This bond protects an individual who is receiving day-to-day care from a guardian. If the guardian fails to perform his or her obligations, someone can make a claim against the person.
  • Trustee Bond – It’s the trustee’s duty and responsibility to handle the trust’s property and assets. This bond ensures that the trustee fulfills his duties appropriately.
  • Administrator Bond – This bond ensures that the administrator of an estate distributes the estate assets according to local, state and federal laws.
  • Conservatorship Bond – A conservator handles the monetary matters of someone who needs to be cared for by a guardian. This type of bond ensures that the conservator upholds the duties and responsibilities of the role.

A fiduciary bond can range in price and ultimately depends on the value of the estate, as well as a few other factors. It may only be required to pay a portion to fund the bond, rather than the entire amount. For instance, if the fiduciary bond is $100,000, you may only need to pay about $400 to $600, depending on whether you receive approval.

Duties and Obligations of a Fiduciary

Financial advisor talks to clientsThere are many different types of fiduciaries; therefore, their duties and obligations vary. For example, an executor’s duties include taking control of a decedent’s property, collecting debts and arranging appraisals of assets. On the other hand, a trustee may have duties such as directing audits, challenging improper claims and determining claimants. In comparison, guardians and conservators may have the extra responsibility to care for an incapacitated individual or minor.

When fulfilling the role of a fiduciary, the individual must have a high level of loyalty since it’s one of the highest standards of care by either equity or law.

It’s important to note that anyone who gives financial advice or handles funds is also a fiduciary. However, if they work for a company, the company is required to obtain a fidelity bond, which differs from a fiduciary bond.

The Takeaway

Two men shake hands

A fiduciary bond protects individuals who have their estate or trust managed and handled by a fiduciary. While the court may not always require a fiduciary bond, there are some instances where it may make sense to protect an individual’s assets. A fiduciary bond is a crucial protection to aid those who may not have other forms of recourse. Bonded fiduciaries are often members of a person’s immediate family.

Estate Planning Tips

  • Consider talking to a financial advisor experienced in estate planning. Finding one doesn’t have to be hard. SmartAsset’s advisor matching tool can set you up with three personalized financial advisor options in just minutes. If you’re ready, get started now.
  • If you have a sizable estate, estate taxes on either the state or federal level could be hefty. However, you can easily plan ahead for taxes to maximize your loved ones’ inheritances. For example, you can gift portions of your estate in advance to heirs or even set up a trust.

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6 Credit Card Tips to Help Prepare for the Holidays

Is it too soon to start planning your end-of-year holiday events? That may be debatable but we all know how quick retailers are to taking advantage of increased sales brought on by holiday shoppers. With Thanksgiving just around the corner most retailers are already advertising for their big shopping events and Black Friday deals. If […]

The post 6 Credit Card Tips to Help Prepare for the Holidays appeared first on Credit Absolute.

Source: creditabsolute.com