court surety bond

Conservatorship Bond

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The Ultimate Guide to Conservatorship Bonds

A conservatorship bond is a type of probate bond required of a conservator for the protection of a conservatee’s estate. A conservator acts as a fiduciary for the conservatee.

 

A conservator bond is usually required by the court. A person must submit this to qualify as a conservator.

 

According to the Uniform Guardianship and Protective Proceedings Act (UGPPA), a conservator is “a person appointed by the court to administer the property of an adult.”

 

This person will make property decisions on behalf of a conservatee. A conservatee is a person who has been deemed by the court to lack the mental or physical capacity to make the decisions himself or herself. A conservatee is also known as an incapacitated person or ward.

 

The word conservator is often used interchangeably with the word guardian. Both are appointed by the court to take care of a conservatee but for different purposes.

  • Conservator – a court-appointed person who takes care of a conservatee’s estate or financial dealings.
  • Guardian – a court-appointed person who makes healthcare decisions for the conservatee including other decisions that don’t involve money. In some cases, however, guardians are allowed by the court to handle a specific amount of the conservatee’s money such as social security pension or disability benefits.

 

A conservator can also act as a guardian as long as he or she will file for both roles in court.

 

The person who is acting as both may or may not obtain separate bonds to fulfill the role, depending on the state’s law.

 

Some states require a person to obtain a Conservatorship Bond and a Guardianship Bond. In other states, only one bond is required.

Who are the parties involved in a Conservatorship Bond?

There are three parties in every surety bond (including a conservatorship surety bond): Principal, Obligee, and Surety Bond Company.

 

The conservator will be referred to as the Principal of the bond. As such, the conservator will be indebted to the Obligee. The Obligee is usually the court requiring the conservator to get a bond.

 

The third party is the surety bond company. The surety bond company will financially guarantee that the conservator properly performs their duties as the fiduciary.

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Who should get a Conservatorship Bond?

Any person who is required by the court to obtain one prior to becoming a conservator. This can be any of the following:

  • Conservatee’s spouse or domestic partner
  • Conservatee’s adult child
  • Conservatee’s parent
  • Conservatee’s relative
  • Conservatee’s friend
  • An attorney who specializes in conservatorship law and practice
  • A private professional fiduciary

Why is a Conservatorship Bond Required?

Since conservators are given full or partial authority over someone, the court requires conservator bonds to protect at-risk individuals and their estates.

 

This is to ensure that the conservator will faithfully perform the duties required by the court and to recover any losses if the conservator commits misconduct.

 

Some of these duties are as follows:

  • Develop a plan on how to manage the assets
  • Manage the conservatee’s assets with the utmost care
  • Prepare an inventory of the conservatee’s assets for the court

Some of the activities that conservators can do are as follows:

  • Open a bank account for the conservatee
  • Apply for government benefits
  • Transfer a conservatee’s stocks, mutual funds, or bonds into the conservator’s name
  • Sign home contracts or leases on behalf of the conservatee

 

If, for example, a conservatee’s estate loses value due to the dishonesty or mismanagement of the conservator, the court may take action against the bond by filing a claim.

 

The money that the court will receive will be used to pay the monetary losses that the conservatee has suffered.

What is the role of the Surety Bond Company in Conservatorship Bonds?

The surety will serve as the conservator’s financial supporter. If a valid claim is made, the surety will pay the claim on behalf of the conservator. However, the conservator is expected to indemnify the surety after the claim has been paid.

How much does a Conservatorship Bond cost?

Typically you will pay 0.5% of the bond amount as your bond cost (also known as the premium).  However, as bonds get larger (usually over $500,000), there is a sliding scale and the premium will be less than 0.5%.

 

For example, if the bond amount is $200,000:

$200,000 x 0.005 = $1,000 is the bond premium

 

Bonds larger than $500,000 are based on a sliding scale and will cost slightly less than 0.5%.

 

The bond premium is paid every year by the conservator to the surety up until the conservatorship bond is canceled or released by the court.

The court may adjust the bond amount according to the current value of the conservatee’s estate. Your bond amount could either increase or decrease.

How to get a Conservatorship Bond

We’ve made the conservatorship bond process easier so that you can get yours immediately. Just make sure that you have gathered the documents needed before submitting your application to avoid delays.

 

STEP1: APPLY FOR THIS BOND
If you’re ready to do this now, you may APPLY HERE.

 

STEP 2: ASSESSMENT
Next, you will be asked to submit a few standard information to assess the following:

  • Your job or business history
  • Your credit score
  • Your financial strength

Aside from those, the underwriter will request you to submit the following:

  • Any court documents that show that you are asked to get this bond.
  • A written explanation as to why you are appointed as the conservator and the type of appointment (e.g. general conservator, temporary conservator, LPS conservator).

STEP 3: INDEMNITY AGREEMENT
Once the underwriting process is complete, you will be asked to sign an indemnity agreement. Once signed, the bond will be issued and sent to you.

How can I become a conservator?

The conservatorship application process varies per state. The process is dictated by the state’s specific probate code.

However, there are some similarities on how a conservatorship is processed in all states. Please see the list below.

  • Complete a petition for appointment form
  • File the petition in the probate division of the court in your state
  • Pay the filing fee
  • File a conservatorship bond to the court clerk
  • Sign the affirmation or oath