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A guardianship bond assures a court that a person designated to serve as a guardian will perform his or her duties as required by law. It is a guarantee of performance. Some jurisdictions refer to this type of bond as a custodian bond. Certain situations require courts to appoint a guardian to manage the finances of a person who cannot handle his or her own finances, such as a minor child, an elderly person or a disabled person. This bond protects the finances or assets of the person who is the subject of the guardianship.
If a court appoints a guardian to someone, the law may require the guardian to provide a guardianship bond. A bonding company provides the bond to the guardian for a fee. If the guardian mismanages or steals assets, then the bond will operate like an insurance policy and pay the person who lost the assets or income. The bonding company will then take legal action against the person serving as the guardian to try to recover whatever money it paid out pursuant to the guardianship bond. This is how the bond functions to protect the subject of the guardianship.
To obtain a guardianship bond, a person must typically submit an application to a bonding company. This may, depending on the amount of the bond, require a credit check. The amount of the guardianship bond will depend on the law of each jurisdiction. The law may require the bond amount to match the assets and income of the person subject to the guardianship. Alternatively, the court may use a formula to establish the amount of the guardianship bond.
If a person is not bondable, then the court will likely select someone else to serve as a guardian. A person is said to be bondable if a bonding company is willing to issue a bond to that person. A bonding company will issue a bond, if it is confident it can recover its money in the event of a default. The court will usually allow the cost of a bond to be paid from the resources of the person who is the subject of the guardianship. The person serving as guardian is not required to pay for the bond out of his or her own pocket.
A person serving as guardian usually must provide reports to the court concerning the guardianship. The guardian must include an accounting of how he or she expends resources. It is also possible for the person serving as a guardian to request the court to waive the bond requirement. This, of course, will depend on each jurisdiction’s laws and the circumstances of each situation.
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