The process of establishing and maintaining legal guardianship over a minor or disabled adult can be complex, time-consuming, and emotionally charged. Because of this, many of the probate courts that handle guardianship cases require the person applying for guardianship to obtain a guardianship bond.
In this article, we'll discuss the basics of guardianship bonds, including what a guardianship bond is, why many courts require guardianship bonds, and how much you can expect to pay when applying for a guardianship bond. First, however, we'll cover the basics of probate court bonds.
Probate Bond Basics
A probate bond is a type of surety bond that provides a financial guarantee of one party's legal and ethical duties and obligations to another party. (For a quick guide to the basics of surety bonds, including definitions of key terms, see our article, What Is a Surety Bond?) A guardianship bond (which can also be called a conservator bond or custodial bond) is a type of probate bond that may be required during the process of assuming guardianship of a minor or disabled adult.
In the case of guardianship bonds, the bond's principal is the person applying for guardianship, the obligee is the probate court, and the surety is an insurance company that issues the bond and acts as a neutral financial guarantor. Guardianship bonds are not always required, but they serve many important purposes when they are.
Why Do Probate Courts Require Guardianship Bonds?
A legal guardian takes on responsibility for the physical, the financial, and, often the emotional well-being of a vulnerable individual. A guardianship bond provides a guarantee, backed by a neutral third party, that the principal will take these obligations seriously and execute them faithfully according to the court's orders.
That financial guarantee helps create stability and reliability for the child or disabled adult. It also helps prevent people from assuming guardianship who are unable or unwilling to take on the responsibilities of the role, or who would take advantage of their role for personal gain.
Guardianship bonds are especially crucial in circumstances where:
- A minor or disabled individual has considerable assets in their name
- Guardianship is disputed between multiple parties
- The court has appointed someone other than a close relative as a guardian
Guardianship bonds help create trust and accountability at all levels of the guardianship process. Now, let's look at how they perform that function.
How a Guardianship Bond Works
During a guardianship hearing, the probate judge will inform the principal if a guardianship bond is required. The judge sets the amount of the guardianship bond and its term length, which can vary widely.
To obtain a guardianship bond, the principal contacts an insurance company or surety broker and requests a quote. Using the principal's credit score and other information on the credit report, the surety assesses the principal's risk and provides them with a quote for the bond premium. If the principal accepts the quote, they pay the premium, receive the bond paperwork from the surety, and file the bond with the probate court.
The principal is now covered by the surety bond. Should the court or another party determine at any point that the guardian has not fulfilled their obligations, that party can file a claim against the guardianship bond. The surety will investigate and pay a valid claim up to the bond's penalty sum. The principal is responsible for paying the surety back for any money that the surety pays to a claimant.
How Much Does a Guardianship Bond Cost?
The premium that a principal will pay for a guardianship bond is a percentage of the required bond coverage amount. Typically, this will be 0.5 to 1 percent of the bond amount. However, many factors can affect the premium that a principal pays for a guardianship bond. These factors include:
- State laws regarding guardianship and/or conservatorship
- The amount of bond coverage that the court requires
- The number and amount of assets and liabilities affected by the case
- The principal's credit score
- The principal's personal and financial history, including previous bond claims or criminal convictions
Surety Bonds Direct offers an easier, faster, and more affordable way to obtain a guardianship bond. We offer free surety bond quotes online in as little as a few minutes, or you can get personalized advice from our surety bond experts by calling 1-800-608-9950.