What is a Guardianship Bond?
A guardianship bond also referred to as a custodian bond (but not necessarily the same), is a type of probate bond that a court may require if you have been appointed the legal guardian of another individual, typically a minor or someone who is disabled and cannot handle their finances.
This bond is to ensure that the appointed guardian acts in the best interest of the person whom they have guardianship.
If the guardian abuses or mismanages the finances of the other person, then a claim will be filed against that bond. It is a way to financially protect the ward if anything happens because of the actions of the guardian.
How would I know if I need to get a Guardianship Bond?
Courts grant rights to individuals selected as ‘guardians’ to manage or care for any property or financial assets left by the deceased, willed to minors or given to people who are incapacitated. The court will appoint a guardian after evidence has proved that the beneficiary or ward is not capable of making well-informed decisions on their behalf. Guardians will not be appointed simply because a beneficiary is physically disabled or an elderly person.
The court will notify you if a guardianship bond is required, whether you are voluntarily or involuntarily appointed a guardian. In some situations, a court may grant a waiver, but not often.
Why is getting a bond for guardianship important?
A guardian can be any qualified adult and does not have to be related to the beneficiary or ward. In most cases, these beneficiaries or wards can choose their own guardians once they prove suitable, to be willing to serve, and to make decisions on their behalf.
Some of these decisions (where the courts award them legal authority) may include, but not limited to:
- Keep estate assets separate (right to sell or buy property for the beneficiary’s sake, and not your own)
- Determine a suitable place where the beneficiary will reside
- Meet the medical needs of the beneficiary
- Keep accurate records of each financial transaction you make on behalf of the beneficiary
- Make prudent investments
- Comply with all state and local laws as specified in the Probate Code
If the beneficiaries possess substantial financial resources and properties, guardians are required to post a guardianship surety bond. Legal guardians are appointed by courts to avoid any future problems with the beneficiaries when dealing with financial assets and properties to meet debts, legacies or commitments. They are held to a great standard of care in performing their fiduciary responsibilities.
Therefore, you – as the guardian – assures the court that you are highly capable of exercising proper conduct in the legal custody of your beneficiary’s belongings and finances.
Guardianship Bond requirements
So you have been court-appointed as a legal guardian and looking to secure a guardianship bond in the process.
Here are some basic requirements that you would need to provide your selected surety company to be issued a bond:
- Completed application form
- Financial statements (personal credit score, any applicable financial documents that can prove your financial strength)
- Copy of the official order or ruling by the court
The bottom line that the underwriter needs to see that the applicant has the maturity, capacity, and experience to properly manage the funds.
How much does a guardianship bond cost?
The amount of the guardianship bond will determine the cost of the bond. The court will set the amount of the surety bond that is required for guardianship. This is often based on the finances and assets of the ward.
A licensed surety bond agent at our office will be able to provide you with a fast and free quote. The cost is typically between 0.5% and 1.5% of the amount set by the court for the surety bond.
Guardianship bonds remain valid until a given period that the person you are caring for requires financial assistance and management. As long as a minor, elderly or disabled individual needs financial supervision, a guardian is required. A guardianship bond, however, can be ceded when a minor turns 18 years of age. The surety company will charge an annual premium for the bond that must be paid until the court releases the bond. Possibly, a lowered bond amount can be requested. Once the courts grant it, you can pay a reduced annual premium.
To get a free quote, simply complete our simple application form, and you will hear from one of our professional agents as soon as possible! Once you have your quote for the guardianship bond, we will help guide you through the simple process of getting your guardianship bond quickly and easily.