A Conservator Bond, otherwise known as a guardianship bond, is a type of court required Fiduciary Surety Bond. In the event that a conservator is appointed to handle the affairs of a minor or an incapacitated adult (the conservatee), the conservator may be required to obtain a conservator bond in order to protect the interests and affairs of the conservatee. Guardianship bonds are often required when there are assets purposed for the care and well-being of the conservatee, to be managed by the conservator.
Conservator Surety Bonds involve three parties.
You will need to get a conservator bond if you are chosen to be the guardian of a minor, disabled or elderly person, or placed in charge of their estate or financial affairs, and a judge decides that a bond is necessary. Some states require all guardians to secure bonds, others leave it to the discretion of the courts, and some states do not require guardianship surety bonds at all. The guardianship bond remains in effect for as long as the conservatorship, with an annual premium charged for the bond.
Conservator bonds exist to prevent the mismanagement of the assets of one who cannot manage their own finances.
The bond protects the conservatee from losses caused by their guardian improperly managing their assets. In the event that a loss occurs on account of dishonest or poor behavior on the part of the guardian, the conservatee can make a claim against the bond to recoup their assets. After paying out the claim, the surety will then seek reimbursement from the conservator for the amount paid out.
Requirements for the amount of a guardianship bond vary greatly from state to state. Some states outline minimum bonding amounts, others have a formula for calculating the amount, and some states leave it to the discretion of the court, or offer no guidance at all. Many times conservator bonds are written for the value of the conservatee’s assets, plus one year of the conservatee’s income.
Generally conservator bonds cost a percentage of the total assets being protected, and are paid on an annual basis. With good credit, the conservator bond premium cost is generally in the range of 5% of the total surety bond amount. In many conservatorship cases there are additional upfront costs such as attorney’s fees, filing costs, and medical examinations to prove the need for guardianship and appoint a guardian. These conservatorship costs, including the annual bond premium, usually are paid from the assets of the conservatee. In some cases, the conservator can cut down the cost of the conservator bond by only insuring a portion of the conservatee’s assets, thus lowering the amount of the guardianship surety bond.
Here are the usual requirements to process a conservator bond:
Some cases will require additional documents. Generally conservators need to have reasonably good credit to be approved for a guardianship bond.
Viking Bond’s team of expert bonding professionals is here to help make the process of securing your guardianship bond as smooth and fast as possible. Contact us today to secure your guardianship bond.
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