• January 15, 2018

Why Surety Bonds Are Important for Conservators and Guardians

Why Surety Bonds Are Important for Conservators and Guardians

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When appointing a conservator or guardian, most courts in most states will require a surety bond to be posted. Since many people aren’t familiar with how surety works, they often ask why a surety bond is necessary.

Why Are Surety Bonds Required?

Surety bonds act as a type of insurance for a protected person. They are a financial guarantee that, should a theft of funds take place, the protected person will not have to suffer financial losses.

States have their own set of laws regarding conservators, guardians and surety bonds, so make sure to check your state’s statutes or confer with a legal council to fully understand how a surety in your state works.  In Minnesota, for example, conservators managing any estate worth more than $10,000 must be bonded. Regardless, it’s always better to have a bond than forgo one.

Who Has to Obtain the Surety Bond?

Although surety bonds cover the protected person, it is the job of the conservator or guardian to obtain and pay for the bond. This is because surety differs from standard insurance. The person being protected doesn’t purchase the bond, the person or organization that is charged with performing the duties of a conservator or guardian must obtain the bond.

How Much Do Surety Bonds Have to Cover?

When appointing a conservator or guardian, the court will usually set the bond amount. The amount is usually based on the protected person’s assets. It’s important to have the bond amount set as close to the total assets as possible (the amount is ultimately up to the court’s discretion). If the bond exceeds the total assets, it exposes you to liability issues. This is why it is important to have as much information about the assets contained within the estate as possible.

How Can You Obtain a Surety Bond?

Surety bonds must be provided by a federally and state approved surety company. However, you don’t have to go directly to a surety to obtain a bond, and this is not exactly recommended, either. Surety can be a confusing process, and the best way to obtain a bond quickly, and for the right amount, is to work with a surety agency. Agencies will help you with everything from determining bond amounts to finding a reliable surety to provide the bond.

At The Patrick J. Thomas Agency, we can help you obtain a bond for a conservator or a guardian. To get started on the process, contact our agents today.

 

Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.