New York Guardian Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a New York Guardian bond.

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: Certain guardians managing a ward’s property in New York
• Purpose: To ensure the ward receives compensation for financial harm if the guardian mismanages their property
• Who Regulates Guardian Bonds in New York: The court with jurisdiction over where the minor/adult resides

Background

New York Mental Hygiene (MHY) Law 81.02 and New York Surrogate’s Court Procedure Act (SCP) 1701 require all guardians to be appointed by a court before assuming their fiduciary duties. The New York legislature enacted the appointment requirement to ensure guardians act in the best interests of the ward when making decisions related to their welfare or managing their assets. To provide financial security for the enforcement of this requirement, certain guardians managing a person’s property must purchase and maintain a probate surety bond before becoming appointed as a fiduciary.

In New York State, a guardianship case can be started in Supreme/County Court, Surrogate’s Court, or Family Court depending on the age and circumstances of the person for whom guardianship is sought. The types of guardianships covered in this page and which court they should be filed in are listed below:

• Guardianship cases for minors who have inherited or been awarded any assets should be filed in Surrogate’s Court.
• Guardianship cases for adults with intellectual or developmental disabilities should be filed in Surrogate’s Court
• Guardianship cases for adults who have become incapacitated should be filed in Supreme Court or County Court

What is the Purpose of the New York Guardian Bond?

New York requires certain guardians to purchase a surety bond as a prerequisite to being appointed as a fiduciary over a person’s property. The bond ensures that the ward will receive compensation for financial harm if the guardian fails to abide by the regulations outlined in New York MHY Law 81.25 and New York SCP 1708. Specifically, the bond protects the ward if the guardian fails to adhere to all court orders or mishandles the person’s assets.

For example, if a guardian uses money from the ward’s bank account to pay for the guardian’s personal expenses or mixes the estate’s funds with their own, the ward can file a claim against the guardian’s bond to recoup their losses. In short, the bond is a type of insurance that protects the ward if the guardian does not fulfill their fiduciary duties.

How Can an Insurance Agent Obtain a New York Guardian Bond?

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How is the Bond Amount Determined?

For guardianships of an adult, New York MHY Law 81.25 grants the court the authority to determine the required bond amount on a case-by-case basis and consider the value of the ward’s property and income when setting the amount. The court may reduce the required bond amount by the value of any assets deposited into a restricted account as directed by the court. The court will inform the guardian of the required bond amount when the judge issues the Order and Judgement.

For the guardianships of a minor, New York SCP 1708 grants the court the authority to determine the required bond amount on a case-by-case basis. The required bond amount can be reduced partially or in full if the guardian deposits the minor’s assets with a financial institution or into a government bond as directed by the court. The court will inform the guardian of the required bond amount when the judge issues the Order and Judgement.

What are the Underwriting Requirements for the New York Guardian Bond?

Most surety companies will examine the following factors when determining eligibility for the New York Guardian bond:

• Guardian’s credit history
• Whether or not the estate has an attorney
• Whether or not the guardian is a family member
• The guardian’s occupation
• Whether or not the guardian is replacing a prior fiduciary
• If the guardian 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 New York Guardian Bond Cost?

Surety companies typically determine the premium rate for Guardian 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 New York Guardian bond:

$1,500,000 Guardian Bond Cost

Who is Required to Purchase the Bond?

New York requires certain guardians to purchase a surety bond as a prerequisite to being appointed as a fiduciary over a person’s property. To paraphrase New York MHY Law 81.03, a “guardian” is an individual or organization appointed as a fiduciary by the court to act on behalf of a minor or adult in providing for personal needs and/or property management. Likewise, a “ward” is defined as a minor, incapacitated adult, or intellectually disabled adult that is incapable of managing their property or providing for their personal needs.

There are different kinds of guardianships available for both adults and minors in New York, as outlined below:

• Guardian Appointed for Personal Needs: A guardian authorized to take custody of and provide care for a ward, including making medical and personal decisions on their behalf. In this kind of guardianship, the court will typically waive the bonding requirement.
• Guardian Appointed for Property Management: A guardian with legal authority to safeguard the money, property, or assets that belong to the ward. In this kind of guardianship, guardians are typically required to obtain a bond.

The court has the authority to require a surety bond for guardians under good cause and will determine if a bond is necessary along with the required bond amount on a case-by-case basis. Generally, guardians appointed for personal needs only are not required to obtain a bond.

How do New York Guardians Become Appointed as Fiduciaries?

Guardians in New York must navigate several steps to become appointed as fiduciaries. Below are the general guidelines, but appointees should refer to the appointment statutes or the New York Courts’ website for details on the process.

Guardians of a Minor

Step 1 – Hire an Attorney

Although not explicitly required, it is highly recommended that guardians hire an attorney to assist with the guardianship process.

Step 2 – Determine the Appropriate Court

Surrogate Court is the appropriate court to file for guardianship of a minor when:

• • The child is 17 years old or younger, not married, and not in military service
  • One or both of a child’s parents are unable to care for the child and/or the child has inherited or was awarded assets such as property or money

If the minor’s circumstance does not meet the above criteria, the case should be filed in Family Court.

Step 3 – File All Required Forms

Persons seeking guardianship over a minor must file a petition for appointment with the surrogate court with jurisdiction over where the minor resides. Petitioners can obtain the necessary items online here or from the court, and must ensure they submit the following legal forms:

• • Combined Oath and Designation
  • Joinder and Statement of Preference of Infant 14 Years and Over
  • Waiver of Process, Renunciation and Consent to Renunciation
  • Affidavit of Proposed Guardian of the Person
  • Affidavit of Parent

Petitioners can get help completing and filing the forms at a Court Help Center online here. The forms can be filed online here or in person at the surrogate court with jurisdiction, and petitioners must pay a filing fee when starting the case.

Step 4 – Notify the Appropriate Parties

After submitting the required items to the court, petitioners must complete a citation and  deliver the citation as notice to all interested persons in the case. The court will direct the petitioner as to who must be served notice. If in New York, service has to be made by physically handing someone the citation ten days before the court date. For more information on how to serve a person, visit the New York Courts’ website.

Step 5 – Attend a Hearing

Petitioners may be required to attend a hearing conducted by the Surrogate Court and present evidence as to why the minor is in need of guardianship. However, this step is typically skipped when the petitioner is only seeking guardianship of a minor’s property.

When a hearing is required, the judge will consider evidence presented by the petitioner as well as evidence from the minor to determine if guardianship is necessary. If the judge decides to appoint the guardian, the court will inform the guardian if a bond is required and issue a letter of guardianship to the petitioner.

Step 6 – Purchase a Surety Bond

Unless otherwise exempt, guardians of a minor must purchase and maintain a surety bond (limits outlined above).

Guardians of an Incapacitated Adult

Step 1 – Hire an Attorney

Although not explicitly required, it is highly recommended that guardians hire an attorney to assist with the guardianship process.

Step 2 – File All Required Forms

Persons seeking guardianship over an alleged incapacitated adult must file a petition for appointment with the county court with jurisdiction over where the adult resides. The petition may need to be filed with the New York Supreme Court depending on the specific circumstances of the adult. Petitioners can obtain the necessary items online from the court, and must ensure they submit the following legal forms:

• • Petition for appointment
  • An order to show cause
  • A request for judicial intervention

Petitioners can get help completing and filing the forms at a Court Help Center online here. The forms can be filed online here or in person at the surrogate court with jurisdiction, and petitioners must pay a filing fee when starting the case.

Step 3 – Notify the Appropriate Parties

After submitting the required items to the court, petitioners must complete a citation and  deliver the citation as notice to all interested persons in the case. The court will direct the petitioner as to who must be served notice. If in New York, service has to be made by physically handing someone the citation ten days before the court date. For more information on how to serve a person, visit the New York Courts’ website.

Step 4 – Attend a Hearing

Guardians must attend a hearing conducted by the court and present evidence as to why the adult is in need of guardianship. The court will examine the evidence presented by the guardian as well as that presented by the individual being evaluated (if any) and make a determination as to whether or not guardianship is necessary. If the court finds a basis for the appointment, it will inform the guardian if a bond is required and issue a letter of guardianship to the petitioner.

Step 5 – Purchase a Surety Bond

Unless otherwise exempt, guardians of a minor must purchase and maintain a surety bond (limits outlined above).

Guardians of an Intellectually or Developmentally Disabled Adult

Step 1 – Hire an Attorney

Although not explicitly required, it is highly recommended that guardians hire an attorney to assist with the guardianship process.

Step 2 – File All Required Forms

Persons seeking guardianship over an alleged disabled adult must file a petition for appointment with the surrogate court with jurisdiction over where the adult resides. Petitioners can obtain the necessary items online from the court, and must ensure they submit the following legal forms:

• • Article 17-A Guardianship petition
  • Combined Oath and Designation
  • Affidavit of the proposed guardian
  • Affidavit of Examining Physician or Licensed Psychologist
  • Waiver of Process Renunciation Consent to Appointment of Guardian
  • Consent, Oath and Designation
  • Notice of Petition
  • Affidavit of Mailing of Notice of Petition
  • 17-A Guardianship Citation

Petitioners can get help completing and filing the forms at a Court Help Center online here. The forms can be filed online here or in person at the surrogate court with jurisdiction, and petitioners must pay a filing fee when starting the case.

Step 3 – Notify the Appropriate Parties

After submitting the required items to the court, petitioners must deliver a copy of the petition and order to show cause to all interested persons in the case. The court will direct the petitioner as to who must be served notice. If in New York, service has to be made by physically handing someone the citation ten days before the court date. For more information on how to serve a person, visit the New York Courts’ website.

Step 4 – Attend a Hearing

Guardians must attend a hearing conducted by the court and present evidence as to why the adult is in need of guardianship. The court will examine the evidence presented by the guardian as well as that presented by the individual being evaluated (if any) and make a determination as to whether or not guardianship is necessary. If the court finds a basis for the appointment, it will inform the guardian if a bond is required and issue a letter of guardianship to the petitioner.

Step 5 – Purchase a Surety Bond

Unless otherwise exempt, guardians of a minor must purchase and maintain a surety bond (limits outlined above).

How do New York Guardians File Their Bonds?

Guardians should file their completed bond forms, including the power of attorney, and their notarized oath and designation with the county clerk in the county where the ward resides.

The surety bond requires signatures from both the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:

• Legal name of the entity/individual(s) buying the bond
• Legal name and county of the ward
• Surety company’s name and address
• Bond amount
• Date the bond is signed
• Date the guardian was appointed

What can New York Guardians do to Avoid Claims Made Against Their Bonds?

To avoid claims against their bonds, guardians in New York must ensure that they:

• Perform all of their fiduciary duties
• Obey all court orders
• Do not mismanage the ward’s property
• Do not spend or sell the ward’s assets without court approval