What is a Conservatorship Bond?
A conservatorship bond is a type of surety bond that protects a person who is the subject of a conservatorship. The bond provides financial recompense should the person or entity that has been appointed as the conservator fail to fulfill the duties and obligations assigned to them.
Conservatorship bonds generally provide protections against violations of their fiduciary duty that can include:
- Theft
- Fraud
- Mismanagement of funds
- Failure of a conservator to perform their duties
The Basics of Conservatorships
Conservators are court-appointed fiduciaries who are charged with managing a protected person’s assets. They are responsible for protecting the estate of a protected person and generally have the power to manage the person’s investments, assets and day-to-day spending. Conservators also generally have the power to sign contracts, and, with the court’s permission, can sell real estate and perform other duties.
Conservators are often charged with managing an estate, paying lawful debts, collecting debts owed to the estate, and managing investments. They also have the power to hire professionals to help them with accounting, investing, taxes, etc.
There are various duties and powers the court can grant a conservator. A full description of the powers and other expectations the court has of a conservator can be found within MS 524.5-417.
For more information on Minnesota Conservatorships, visit the MN Courts website.
Why a Surety Bond is Needed for Conservatorships
Should the conservator fail in their duties, the conservatorship bond protects the affected party’s assets and finances. The amount for a conservatorship bond is set by the court and is based on the financial value of the protected person’s estate. While the bond doesn’t guarantee that the person will faithfully perform their duties, it will provide financial payments to the protected person if their assets are mismanaged or any fraud or theft is committed.
Who Needs to Obtain a Conservatorship Bond?
Anyone can request a conservatorship bond. If you are a family member or friend who is concerned about a person, you can request that the court set a bond.
It is not up to the protected person to obtain a surety bond for their conservatorship. A court will generally require one for a conservatorship, but it is up to the conservator to pay for (using funds from the estate) and obtain one before assuming their official duties.
Obtain a Conservatorship Bond
The rules and requirements for conservatorships vary from state to state. Unless the person’s estate is very small, a conservatorship bond will most likely be required. This is common practice in many states.
For more information on filing for a conservatorship or obtaining a conservatorship bond, contact the experienced surety professionals at the Patrick J. Thomas Agency.