The topic of guardianship’s is quite dense. Therefore, this will begin a series of posts concerning guardian bonds. This first post is a brief overview of what a guardianship is and why a bond might be required.
Guardian bonds are required in Surrogates’ Courts for the benefit of an incapacitated person or a minor. The court determines whether or not an alleged incapacitated person (obligee) can manage his or her own funds. If the judge decides the obligee cannot manage his or her funds, the judge will subsequently appoint a guardian of the person and/or property. The bond amount of a guardian bond usually equals the value of the liquid assets the guardian takes control of.
The court requires a bond to guarantee the appointed guardian of the property will not abuse his authority as guardian. The guardian has to manage the incapacitated person or minor’s assets in accordance with the orders of the court. This often means the guardian only spends money on the obligee’s necessities such as food, clothing, shelter, and utilities. The guardian may only receive reimbursement from the obligee’s funds if the court says so.
Guardians should always use paper checks when spending the obligee’s money because the court can follow a paper trail and accounting much more easily in this manner. If the guardian must take cash out of the obligee’s assets, the guardian should always obtain a receipt for purchases as well as for the cash withdrawals.
A guardian must file an annual accounting with the court and send a copy of the accounting to the surety. The accounting ensures the guardian manages the obligees funds correctly. Some states have a more thorough review of a guardian’s accounting than other states. Irregardless of this fact, the guardian must make sure the surety receives a copy of the accounting filed with the court to make sure no claims will arise against the bonded guardian.