Mississippi Conservator Bond: A Comprehensive Guide
At a Glance:
- Average Cost: Calculated based on a tiered structure
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs It: Most conservators appointed as fiduciaries in Mississippi
- Purpose: To ensure the ward receives compensation for financial harm if the conservator mismanages their estate
- Who Regulates Conservator Bonds in Mississippi: The chancery court with jurisdiction over where the ward resides or has property
Background
Mississippi Code 93-20-401 requires all conservators to be appointed by a court and swear an oath before assuming their fiduciary duties. The Mississippi legislature enacted the appointment requirement to ensure conservators act in the ward’s best interests when managing their estate. To provide financial security for the enforcement of this requirement, most conservators must purchase and maintain a probate surety bond before becoming appointed as a fiduciary.
What is the Purpose of the Mississippi Conservator Bond?
Mississippi requires most conservators to purchase a surety bond as a prerequisite to being appointed as a fiduciary over a ward’s estate. The bond ensures that the ward will receive compensation for financial harm if the conservator fails to abide by the regulations outlined in Mississippi Code 93-20-416 and Mississippi Code 93-20-417. Specifically, the bond protects the individual if the conservator fails to adhere to all court orders or mismanages the ward’s assets.
For example, if a conservator uses money from the ward’s bank account to pay for unauthorized expenses or mixes the estate’s funds with their own, the ward can file a claim against the conservator’s bond to recoup their losses. In short, the bond is a type of insurance that protects the individual if the conservator does not fulfill their fiduciary duties.
How Can an Insurance Agent Obtain a Mississippi Conservator Bond?
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How is the Bond Amount Determined?
Mississippi Code 93-20-416 dictates that the bond amount must equal the aggregate capital value of the estate’s property plus the estimated income to be generated by the estate over the next year.
The bond amount may be reduced by the value of any deposited assets that cannot be withdrawn without a court order or any land that the conservator can not sell without authorization from the court. Conservators that do not wish to purchase a bond may request to submit another form of collateral instead, such as a pledge of securities or a mortgage of land.
Can the Bond Amount be Adjusted?
Yes, as Mississippi Code 93-20-415 allows for any person interested in the welfare of the ward may petition the court to adjust the required bond amount or require an additional bond if they deem one necessary. The court will have the final say in making any changes to the required bond amount.
What are the Underwriting Requirements for the Mississippi Conservator Bond?
Most surety companies will examine the following factors when determining eligibility for the Mississippi Conservator bond:
- Conservator’s credit history
- Whether or not the estate has an attorney
- Whether or not the conservator is a family member
- The conservator’s occupation
- Whether or not the conservator is replacing a prior fiduciary
- If the conservator has ever committed a felony
- Whether or not there is any ongoing business in the estate
- If a creditor is requiring the bond
- If the bond amount is greater than or equal to the estate’s value
How Much Does the Mississippi Conservator Bond Cost?
Surety companies typically determine the premium rate for Conservator bonds based on a tiered structure, so larger bond amounts will be charged a lower premium rate than smaller bonds.
The following table illustrates the pricing structure for the Mississippi Conservator bond:
$1,500,000 Conservator Bond Cost
| Bond Amount | Premium Rate | Total Bond Cost |
|---|---|---|
| First $20,000 | 0.75% | $150 |
| Next $40,000 | 0.60% | $240 |
| Next $140,000 | 0.50% | $700 |
| Next $300,000 | 0.375% | $1,125 |
| Next $1,000,000 | 0.25% | $2,500 |
| Total cost of $4,715 |
Who is Required to Purchase the Bond?
Mississippi requires most conservators to purchase a surety bond as a prerequisite to becoming a court-appointed fiduciary. To paraphrase Mississippi Code 93-20-102, a “conservator” is an individual or organization appointed as a fiduciary to manage and make decisions for a person’s property and/or financial affairs. Likewise, a “ward” is a minor or adult for whom a conservator has been appointed that is deemed incapable of managing their estate. In Mississippi, a minor is an unemancipated individual under the age of 21 years while an adult is an individual at least 21 years old or an emancipated individual under the age of 21 years.
Conservators are not required to purchase a surety bond, unless explicitly required by the court, in the following situations:
- The court determines a bond is not necessary to protect the interests of the ward
- The conservator is a bank that is insured by the FDIC and qualified to do trust business
- The ward is a minor and the minor’s parents waived the bond requirement in a will
- The conservator deposits a portion of the ward’s assets into an FDIC-insured financial institution subject to prior court approval for release
In lieu of a surety bond, the court may require the conservator to furnish an alternative asset-protection arrangement.
How do Mississippi Conservators Become Appointed as Fiduciaries?
Conservators in Mississippi must navigate several steps to become appointed as fiduciaries. Below are the general guidelines, but appointees should refer to the appointment statutes or the Mississippi Court’s website for details on the process.
Step 1 – Hire an Attorney
Although not explicitly required, it is highly recommended that conservators hire an attorney to assist with the conservatorship process.
Step 2 – Meet the Qualifications
Persons are ineligible for appointment as a conservator if they are a person that provides paid services to the ward or if they are an employee or relative of an individual who provides paid services to the ward. An owner, operator, or employee of a long-term care facility that provides care to the ward is also ineligible for appointment unless they are related to the ward by blood, marriage, or adoption.
When considering who to appoint as conservator, the chancery court will consider the following factors:
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- The person’s relationship to the ward
- The expressed wishes of the ward
- The likelihood that the person would fulfill their duties as conservator
- The extent to which the person and the ward have similar values and preferences
The court will act in the best interests of the ward and may choose to decline someone petitioning for appointment if they believe that the appointment would be detrimental to the ward. If no qualified person can be appointed, the court may appoint the clerk of the chancery court as conservator.
Step 3 – File a Petition for Appointment
Persons seeking conservatorship over a minor or incapacitated adult must file a petition for appointment with the chancery court in the county where the minor/adult resides or owns property. Petitioners can obtain the necessary forms from the court, and must ensure they complete the form in its entirety to avoid delays in the proceedings. Any person interested in the individual’s estate, financial affairs, or welfare may petition the court to begin protective proceedings over a minor or incapacitated adult.
Step 4 – Attend a Hearing
Conservators must attend a hearing conducted by the court and present evidence as to why the minor or incapacitated adult is in need of conservatorship. The court will examine the evidence presented by the conservator as well as that presented by the individual being evaluated (if any) and make a determination as to whether or not conservatorship is necessary.
Any interested person can apply to the court to participate in the hearing. If the court finds a basis for the appointment, it will issue a letter of conservatorship to the petitioner.
Step 5 – Purchase a Surety Bond
Unless otherwise exempt, conservators must purchase and maintain a surety bond (limits outlined above).
How do Mississippi Conservators File Their Bonds?
Conservators should file their completed bond forms, including the power of attorney, to the clerk of the chancery court of the county where the ward resides or owns property.
The surety bond requires signatures from the surety company that issues the bond, the applicant, and the clerk of the court. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Legal name of the ward
- Surety company’s legal name
- County and term of the chancery court
- Type of fiduciary relationship
- Date the bond is signed
- Bond amount
What can Mississippi Conservators do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, conservators in Mississippi must ensure that they:
- Perform all of their fiduciary duties
- Obey all court orders
- Do not mismanage the estate’s property
- Obtain court approval before using any of the estate’s funds
