"Legal guardianship" is a court granted authority in which a responsible person (a "fiduciary") is appointed to manage the financial affairs and property interests of a third party (a "ward"). A guardianship bond is often required to protect the ward's assets from gross mismanagement or fraudulent conversion by the guardian. A ward can be a minor, having not reached the age of majority and legally unable to handle his or her funds. A ward can also be an elderly person who may no longer be competent to handle his or her finances or where the possibility of exploitation of the senior exists. Because of a guardian's strict duty to act only in the best interests of the ward, avoiding any possible conflicts of interest and exercising the utmost diligence in the management of the ward's affairs, a fiduciary bond is the best form of financial assurance to protect the ward.
Where a request for formal guardianship is initiated, an evidentiary hearing is held to determine competency of the ward (legal or mental) and the court accepts presentation of applicant(s) for guardianship appointment. The court considers all available mechanisms for accomplishing the propert caretaking of the ward and his or assets, the guardianship applicant's qualifications to act as a guardian, and any existing powers of attorney or medical proxy orders that may accomplish the same end. After due consideration, the court hearing the petition for guardianship makes an order following current statutes in the court's jurisdiction, and in those states that have adopted the Uniform Probate Code consideration is often given to the estate treatment provisions of the same. The court's order appointing a guardian will contain any guardianship bond amount and terms.
From a surety bond underwriter's perspective there are several issues that must be considered in order offer terms for the surety bond. Because a guardian is held to a very high standard of care, his or her pattern of adult financial responsibility is paramount. Good personal credit evidencing timely payment of personal obligations and judicious use of credit are primary considerations. The term or length of the bond obligation is secondary. As a rule surety companies will not write guardianship bonds that are likely to extend beyond ten years. Because fiduciary bonds are ordinarily not cancelable, knowing the length of time that the surety will be liable for the guardian's conduct is essential in order to determine the premium to be paid for the bond (ratemaking). Other considerations include any conflict among the heirs, which is very common in guardianship proceedings, the existence of any ongoing business owned by the ward, and the participation of legal and accounting professionals. A typical guardianship request submitted to a surety agent will contain the following:
Underwriting of guardianship bonds requires review by a surety specialist with knowledge about guardianship law in the jurisdiction where the bond will be filed and experience with fiduciary obligations. Surety bond leader, Surety One, Inc., specializes in judicial and fiduciary bonds. We offer guardianship and probate bonds in all fifty states, Puerto Rico and U.S. Virgin Islands. Application submissions are reviewed and responded to on the same day as they are received. We are the MOST RESPONSIVE surety underwriter in the business. Call (800) 373-2804, or email us at Underwriting@SuretyOne.com for a guardianship bond application or for any fiduciary bond need.