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Custodian Bond Information
A custodian bond, also known as a guardianship bond, is often required when a legal guardian has been appointed. These bonds are seen as a unique type of bond and are classed as a surety bond or kind of insurance. The bond acts in the interests of safeguarding an individual who is being cared for by the appointed guardian, also referred to as custodian.
The courts often require a guardian to have a custodian bond. This then ensures that the legal guardian of a vulnerable person is unable to take advantage of their position and that they are acting in the best of interests for the person they care for. The bond is also a guarantee that court orders are followed as requested. In business, such bonds are held by what is known as a custodian bank. A custodian bank mainly safeguards assets such as stocks, shares and currency. They also ensure the safe passage of sale or purchase transactions with other businesses.
It is due to the fact that legal guardians, are not only looking after another, but they also handle the day-to-day running of all financial issues, that custodian bonds are required. The financial issues dealt with by a custodian may include payment of bills, purchasing of groceries or clothing along with any other expenses.
Before a custodian bond can be granted, the person applying to purchase such a bond is often required by the courts to have their application approved as well as undertaking several screening processes.