Guardianship Bonds

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Learn more about guardianship bonds below, and contact us today to request a quote.  If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

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What Are Guardianship Bonds?

A guardianship is a relationship established by a court between an adult and a minor. In legal terms, the minor is often referred to as the guardian’s “ward.”  The court grants the adult guardian the authority to manage any assets and income the minor may have, and in many cases, make other important decisions regarding the minor.

Guardianship carries fiduciary responsibilities, which can be summed up as “always acting in the best interests of the minor.” There are strict rules that govern what a guardian can and cannot do in that fiduciary capacity. For example, guardians cannot use a ward’s funds to enrich themselves or make imprudent financial decisions that put the minor’s assets at risk.

A guardianship bond is a surety bond that the court orders a guardian to purchase as a condition for being appointed as guardian. Its main purposes are:

  • To ensure that a guardian complies with all laws and rules governing the fiduciary duties that go along with the guardian role
  • To provide a way to compensate the minor in the event of a financial loss caused by the guardian’s illegal, unethical, or negligent actions

Who Needs Them?

Guardianship bonds are required in every state, though the terminology sometimes differs. For instance, some states use the term “custodianship” or “conservatorship” instead of “guardianship” when the ward is an incapacitated adult rather than a minor.

Sometimes, the guardian for a minor may have been chosen by the parents and named in their will, then confirmed by a probate court. In other cases, the parent(s) may be living but deemed not capable of managing the child’s assets and income. Whatever the situation may be, the court determines if and when a guardianship bond is required.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Learn more about guardianship bonds below, and contact us today to request a quote.  If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

CONTACT US FOR A

FREE GUARDIANSHIP BOND QUOTE

What Are Guardianship Bonds?

A guardianship is a relationship established by a court between an adult and a minor. In legal terms, the minor is often referred to as the guardian’s “ward.”  The court grants the adult guardian the authority to manage any assets and income the minor may have, and in many cases, make other important decisions regarding the minor.

Guardianship carries fiduciary responsibilities, which can be summed up as “always acting in the best interests of the minor.” There are strict rules that govern what a guardian can and cannot do in that fiduciary capacity. For example, guardians cannot use a ward’s funds to enrich themselves or make imprudent financial decisions that put the minor’s assets at risk.

A guardianship bond is a surety bond that the court orders a guardian to purchase as a condition for being appointed as guardian. Its main purposes are:

  • To ensure that a guardian complies with all laws and rules governing the fiduciary duties that go along with the guardian role
  • To provide a way to compensate the minor in the event of a financial loss caused by the guardian’s illegal, unethical, or negligent actions

Who Needs Them?

Guardianship bonds are required in every state, though the terminology sometimes differs. For instance, some states use the term “custodianship” or “conservatorship” instead of “guardianship” when the ward is an incapacitated adult rather than a minor.

Sometimes, the guardian for a minor may have been chosen by the parents and named in their will, then confirmed by a probate court. In other cases, the parent(s) may be living but deemed not capable of managing the child’s assets and income. Whatever the situation may be, the court determines if and when a guardianship bond is required.

How Do They Work?

A guardianship bond is a legally binding contract between three parties:

  • The court requiring the bond and establishing the required bond amount and its terms is referred to as the bond’s “obligee.”
  • The guardian required to purchase the bond and abide by its terms and conditions is the bond’s “principal.”
  • The bonding company that underwrites and issues the bond is known as the “surety.”

The terms of the bond indemnify the obligee and the surety, hence legally obligating the principal to pay all valid claims against the bond. Any malfeasance by the guardian that results in a financial loss to the minor may be grounds for a claim against the bond. Unless the principal pays the claim promptly, the surety typically will pay it on the principal’s behalf and then collect reimbursement from the principal.

What Do They Cost?

The annual premium for a guardianship bond is a small percentage of the required bond amount established by the court. That amount is based on the value of the minor’s assets, usually excluding the value of illiquid assets such as real estate.

The surety sets the premium rate based largely on the principal’s creditworthiness. This is the best indicator of the degree of ease or difficulty the surety may have in collecting reimbursement for a claim paid on behalf of the principal. With good credit, the premium rate should be somewhere in the standard market rate range of one to three percent.

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Request a quote online or call today to speak with one of our surety bond experts about obtaining a guardianship bond.