California Guardian 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: Certain guardians appointed as fiduciaries over a ward’s estate in California
- Purpose: To ensure the ward receives compensation for financial harm if the guardian mishandles their estate
- Who Regulates Guardian Bonds in California: The superior court of the county where the ward resides or has property
Background
California Probate Code 1514 requires all persons seeking guardianship over a ward to be appointed as a fiduciary by the superior court of the county where the ward resides. The California legislature enacted the appointment requirement to ensure that guardians act in the ward’s best interests when managing their estate. To provide financial security for the enforcement of this requirement, certain guardians must purchase and maintain a probate surety bond before becoming appointed as a fiduciary.
What is the Purpose of the California Guardian Bond?
California requires certain guardians 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 and all persons interested in the ward’s estate will receive compensation for financial harm if the guardian fails to abide by the regulations outlined in Article 3 of the California Probate Code. Specifically, the bond protects the ward if the guardian fails to adhere to all court orders or mismanages the estate’s assets. 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 California Guardian Bond?
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How is the Bond Amount Determined?
California Probate Code 2320 dictates that the bond amount must be equal to the aggregate value of the ward’s personal property plus the estimated gross income to be generated by the estate over the next year as well as any other of the ward’s public entitlements. California Rules of Court 7.207 dictates that the estimated costs to file a claim against the bond must be added to the bond amount.
The bond amount may be reduced by the value of any property deposited with a trust company or financial institution that can not be withdrawn without a court order.
Can the Bond Amount be Adjusted?
Yes, as California Probate Code 2321 permits the superior court to adjust the required bond amount as they see fit. Guardians can petition the court to reduce the required bond amount. The court may require the guardian to furnish an additional bond if:
- The ward’s real property is sold or a mortgage is taken on the ward’s real property
- If the current bond amount becomes insufficient
What are the Underwriting Requirements for the California Guardian Bond?
Most surety companies will examine the following factors when determining eligibility for the California 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 California 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 California Guardian bond:
$1,500,000 Guardian 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?
California requires certain guardians to purchase a surety bond as a prerequisite to becoming a court-appointed fiduciary. To paraphrase the California Judicial Branch, a guardian is an individual or organization appointed as a fiduciary over a ward’s person and/or estate. Additionally, a “ward” is defined as a minor that is incapable of making sound decisions concerning their estate and/or affairs.
Guardians are not required to purchase a surety bond, unless explicitly required by the court, in the following situations:
- The guardianship is only for the ward’s person, not the estate
- A person with the power to nominate a guardian in a will or other similar writing waives the bond requirement
- If the estate has a total net value of less than $15,000, a monthly income of less than $2,000, and all spent income of the estate is for the benefit of the ward
How do California Guardians Become Appointed as Fiduciaries?
Guardians in California must navigate several steps to become appointed as fiduciaries. Below are the general guidelines, but appointees should refer to the appointment statutes or the California Judicial Branch’s website for details on the process.
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 a ward must file multiple forms with the superior court of the county where the child resides. Guardians can obtain the forms online here or from the court, and must ensure to make copies prior to submitting.
Guardians can utilize the free Self-Help Center available at every county court for assistance in the filing process and to ensure they complete the process accurately. Most counties assess a fee, typically $435, to begin the process, and guardians can submit a fee waiver if the minor cannot afford it.
Step 3 – Notify the Appropriate Parties
After submitting a petition for appointment to the court, persons seeking guardianship must have another adult, known as a server, notify the following parties in person:
-
- The minor’s parents
- The minor, if they are at least 12 years old
- Any person with legal custody of the minor
- Any court-appointed guardian of the minor
- Any person nominated as guardian of the child
Guardians must also notify the child’s grandparents, siblings, and anyone else who has the child in their care and can do so by mail or in person. If the guardian is not related to the child, they must also notify the California Department of Social Services.
Step 4 – Complete the Investigation
The court will appoint an investigator to conduct an interview with the proposed guardian to determine if guardianship is necessary. The investigator will submit a report with their recommendations which will be used in the hearing (more on this in Step 4). The investigator will visit the home where the minor will live, interview the proposed guardian, and conduct a background check on the guardian.
The investigator will consider issues like where the minor would attend school, the proposed guardian’s family situation, and any healthcare issues. The investigator will also interview the minor’s parents (if applicable) and the minor themselves, if appropriate.
Step 5 – Attend a Hearing
Guardians must attend a hearing conducted by the superior court of the county where the minor resides and present evidence as to why they are in need of guardianship. The court will examine the evidence presented by the guardian as well as that presented by the minor being evaluated (if any) and make a determination as to whether or not guardianship 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 guardianship to the petitioner.
Step 6 – Purchase a Surety Bond
Unless otherwise exempt, guardians must purchase and maintain a surety bond (limits outlined above).
How do California Guardians File Their Bonds?
Guardians should submit their completed bond forms, including the power of attorney, to the superior court of 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:
- Case number
- Legal name and county of the ward
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name
- Date the guardian is appointed
- Type of fiduciary relationship
- Bond amount and bond premium
- Date the bond is signed
What can California Guardians do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, guardians in California must ensure that they:
- Perform all of their fiduciary duties
- Obey all court orders
- Do not mismanage the ward’s assets
