A Guardianship Bond (also known as Guardian Bond or custodian bond) is required if someone is appointed as the guardian of a minor or otherwise incompetent person, who is incapable of managing his/her financial affairs. Guardianship Bonds are aimed to protect the interest of the person who is being taken care of (ward). Guardianship bonds are customarily filed in a probate court and guarantee faithful performance and honest accounting by the legally-appointed guardian in managing the finances and assets of the minor or otherwise incompetent person.
Legal guardians can be named in a will and appointed by the court. Guardians shall execute and file a bond to be approved by the court “in an amount not less than the estimated value of the personal estate and anticipated income of the ward during the ensuing two years” unless the requirement is waived by the court. The form of the bond is in accordance with the guardianship laws in the respective states. The guardian should provide at least two personal sureties. The court may also require the guardian to file an additional bond.
In the case of an incapacitated or minor person, guardians administer the assets and make decisions and payments for meeting the living expenses, residence, health care, food, education and social activity. The guardian is supposed to consider the wishes of the incapacitated person and in the case of minors, the guardian delivers what is left to the person when the minor reaches the agreed upon age.
Guardianship bonds can be purchased from insurance or bonding companies and the price of the guardianship bond varies “according to the assets and/or annual income of the person who is taken care of.” Normally, the price of the bond will be twice the amount of the person’s assets and/or annual income.