Nebraska Guardian Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Nebraska 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 appointed as fiduciaries in Nebraska
• Purpose: To ensure the ward receives compensation for financial harm if the guardian fails to fulfill their fiduciary duties
• Who Regulates Guardian Bonds in Nebraska: The county court with jurisdiction over where the ward resides or has property

Background

Nebraska Statutes 30-2608 and 30-2620 require all guardians to be appointed by a court before assuming their fiduciary duties. The Nebraska legislature enacted the appointment requirement to ensure that guardians act in the ward’s best interests when making decisions related to their welfare or 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 Nebraska Guardian Bond?

Nebraska requires certain guardians to purchase a surety bond as a prerequisite to being appointed as a fiduciary. The bond ensures that the ward will receive compensation for financial harm if the guardian fails to abide by the regulations outlined in Nebraska Statutes 30-2627 and 30-2640. Specifically, the bond protects the individual if the guardian fails to adhere to all court orders or mismanages the ward’s assets.

For example, if a guardian 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 guardian’s bond to recoup their losses. In short, the bond is a type of insurance in favor of the ward if the guardian does not fulfill their fiduciary duties.

How Can an Insurance Agent Obtain a Nebraska Guardian Bond?

BondExchange makes obtaining a Nebraska Guardian bond easy. Simply log-in to your account and use our keyword search to find the “Guardian” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

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How is the Bond Amount Determined?

Nebraska Statute 30-2640 dictates that the bond amount must equal the aggregate capital value of the estate’s personal property under the guardian’s control plus the estimated income to be generated by the estate from all sources over the next year.

The bond amount may be reduced by the value of any assets deposited that cannot be withdrawn without a court order. Guardians 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 Nebraska Supreme Court Rule 6-1441 dictates that the court may adjust the bond amount or require an additional bond at any time if the current bond is insufficient. Also, Nebraska Statute 30-2645 permits any interested person to petition the court to adjust the bond amount or require an additional bond after the guardian is appointed.

What are the Underwriting Requirements for the Nebraska Guardian Bond?

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

$1,500,000 Guardian Bond Cost

Who is Required to Purchase the Bond?

Nebraska requires certain guardians to purchase a surety bond as a prerequisite to becoming a court-appointed fiduciary. To paraphrase Nebraska Statutes 30-2209 and 30-2601, a “guardian” is an individual appointed as a fiduciary who is responsible for providing care and protection to a ward. Likewise, a “ward” is defined as a minor or incapacitated adult for whom a guardian has been appointed that is incapable of making sound decisions concerning their health and welfare.

Guardians are not required to purchase a surety bond, unless explicitly required by the court, in the following situations:

• The ward nominates a guardian under a written power of attorney and chooses to waive the bond requirement
• The personal property of the ward’s estate has a net value of less than $10,000
• The guardian is the Public Guardian or a financial institution defined under Nebraska Statute 8-101.03
• The court determines that a bond is not necessary to protect the estate’s assets

How do Nebraska Guardians Become Appointed as Fiduciaries?

Guardians in Nebraska must navigate several steps to become appointed as fiduciaries. Below are the general guidelines, but appointees should refer to the appointment statutes or the Nebraska 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 Priority

In guardianship cases over a minor, priority to serve as a guardian is granted in the following order:

• • The minor’s parents
  • Any person the parent has selected to care for the child in the event of their death]
  • Any person acting in the best interest of the child

If the minor is at least 14 years old, the court will appoint the minor’s nominee unless the court determines the appointment goes against the minor’s best interests. If the court determines that the minor’s nominee is not suitable for guardianship, the court will appoint a person they deem to be in the best interest of the minor.

Step 3 – File a Petition for Appointment

Persons seeking guardianship over a minor must file a petition for appointment with the county court with jurisdiction over where the minor resides or owns property. Petitioners can obtain the necessary forms online here or from the court, and must include the following information:

• • Personal information about the person seeking the appointment
  • All interested parties in the ward’s welfare
  • The reasoning for why guardianship is necessary
  • Any additional information requested by the court

Petitioners must pay a $44 filing fee to begin a guardianship case.

Step 4 – Notify the Appropriate Parties

After submitting the required items to the court, petitioners must notify all of the interested persons listed in the petition. The notice must include a notice of the hearing along with a copy of the petition, and must be given to all of the following parties:

• • The minor, if they are at least 14 years old
  • Any living parents of the minor
  • Each individual who had primary care or custody of the minor for at least 60 days preceding the filing of the petition
  • Any other person the court determines is necessary

Step 5 – Complete the Background Checks

After filing the petition for appointment, the proposed guardian must submit the following forms to the court:

• • Affidavit of Sex Offender Registry Search
  • Nebraska State Patrol Criminal History Report
  • Child/Adult Abuse and Neglect Registry Check
  • A complete credit report from any established credit reporting agency

All four of the forms must be submitted at least 10 days prior to the hearing.

Step 6 – Attend a Hearing

Guardians must attend a hearing conducted by the court and present evidence as to why the minor is 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 determine the type of guardianship necessary and issue a letter of guardianship to the petitioner.

Step 7 – Purchase a Surety Bond

Unless otherwise exempt, guardians 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 – Determine Priority

Priority to serve as a guardian is granted in the following order:

• • The ward’s nominee under a durable power of attorney or a person acting under a power of attorney
  • The spouse of the ward or their nominee
  • The adult child of the ward or their nominee
  • A parent of the ward or their nominee
  • A relative of the ward who has resided with him or her for at least 6 months before the petition is filed
  • The nominee of a person or corporation nominated by an entity caring for or paying benefits to the ward
  • The Public Guardian

The court will appoint the guardian best suited for the incapacitated adult and may choose to appoint a person with lower priority or without priority. An owner, operator, or employee of a long-term care facility that provides care to the ward is ineligible for appointment unless they are related to that person.

Step 3 – File a Petition for Appointment

Persons seeking guardianship over an incapacitated adult must file a petition for appointment with the county court with jurisdiction over where the adult resides or owns property. Petitioners can obtain the necessary forms online here or from the court, and must ensure they include the following information:

• • Personal information of the incapacitated adult
  • Personal information about the person seeking the appointment
  • General statement and evaluation of the ward’s condition and estate
  • The reasoning for why guardianship is necessary
  • Any additional information requested by the court

The proposed ward, the parents or guardian of the proposed ward, or any other person interested in the proposed ward’s estate, affairs, or welfare may petition. Petitioners must pay a $44 filing fee to begin a guardianship case.

Step 4 – Notify the Appropriate Parties

After submitting the required items to the court, petitioners must notify all of the interested persons listed in the petition. The notice must include a notice of the hearing along with a copy of the petition, and the petitioner must arrange for the ward to be served personally.

Step 5 – Complete the Background Checks

After filing the petition for appointment, the proposed guardian must submit the following forms to the court:

• • Affidavit of Sex Offender Registry Search
  • Nebraska State Patrol Criminal History Report
  • Child/Adult Abuse and Neglect Registry Check
  • A complete credit report from any established credit reporting agency

All forms listed above must be submitted at least 10 days prior to the hearing.

Step 6 – Attend a Hearing

Guardians must attend a hearing conducted by the court and present evidence as to why the incapacitated 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.

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 7 – Purchase a Surety Bond

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

How do Nebraska Guardians File Their Bonds?

Guardians should file their completed bond forms, including the power of attorney, to the clerk of the county court with jurisdiction over where the ward resides or owns property.

The surety bond requires signatures from the surety company that issues the bond, the applicant, and a notary public. 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 legal name
• Bond amount
• Type of fiduciary relationship
• Date the bond is signed and goes into effect

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

To avoid claims against their bonds, guardians in Nebraska 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