(Note: The pdf for the issue in which this article appears is available for download: BIFOCAL Vol. 35, Issue 5. The article's extensive footnotes are included only in the pdf issue.)
In 1986, two Associated Press writers conducted an investigation of guardianship and conservatorship and came to the conclusion that the system was failing in its purpose. The report provided several examples, including some involving misuse of assets by conservators. For instance, in a famous case in New York, “John Zaccaro, the husband of 1984 Democratic vice presidential candidate Geraldine Ferraro, was removed as a conservator after borrowing $175,000 from his ward’s estate for private investments.” A wave of recommendations and reforms followed this Associated Press report in an attempt to better protect those under guardianship or conservatorship, and there continues to be push for reform.
One method of preventing such violations of the fiduciary relationship between the guardian or conservator and the individual is by requiring the fiduciary to post bond. A bond “is like an insurance policy in that an annual premium is paid and the person in guardianship [or conservatorship] is fully protected should the guardian [or conservator] mishandle the liquid assets. While some courts do this as a matter of routine, others do not.”
Several national guardianship/conservatorship standards address the requirement for bonds. The National Probate Court Standards provides, “Except in unusual circumstances, probate courts should require for all conservators to post a surety bond in an amount equal to the liquid assets and annual income of the estate.” The Uniform Guardianship and Protective Proceedings Act (1998) states, “The court may require a conservator to furnish a bond conditioned upon faithful discharge of all duties of the conservatorship according to law, with sureties as it may specify,” and provides some specifications for such bonds. The standards resulting from the 2011 Third National Guardianship Summit state, “The conservator shall take all steps necessary to obtain a bond to protect the estate, including obtaining a court order.” This language was adopted into the National Guardianship Association Standards of Practice at NGA Standard 18 section IV.
Many of the states, following suit, have included provisions in their statutes regarding guardian or conservator bonds. However, these statutes contain large differences in the details, allowing courts more or less discretion regarding various aspects of bonding requirements, and there is concern whether that discretion is harmful to the individual under guardianship/conservatorship. This article summarizes state statutory provisions on general bond requirements, amount of bond, and exceptions.
General Bond Requirements
Approximately twenty states require a conservator to post bond, nineteen states require bond while allowing courts some manner of discretion, and twelve states give the court complete discretion to either require or dispense with the bond. Not all of the states include a provision regarding whether guardians are required or not required to give bond. Some simply do not distinguish between guardians and conservators, while others do make a distinction but only state whether a conservator is required to give bond. Of those that do include provisions indicating whether guardians are required to give bond, twelve states require a guardian to give bond, three states require bond while allowing courts discretion, nine states give the courts complete discretion, six states do not require a bond unless the court determines one is necessary, and two states do not require a bond.
Amount of Bond
There is also great variation in the amount of guidance the state statutes provide to courts in determining the amount of the bond. Seven states do not include any specifications whatsoever as to how the amount of bond should be determined. Ten states provide minimal guidance, most merely specifying that the sum should be determined by the court, but a few indicating that the court should take the individual’s assets into account. Thirty-four states provide some sort of formula, either specifying the elements a court should consider, outlining a minimum, or providing a detailed formula to determine the amount of bond. Of those thirty-four, sixteen utilize the same formula, many of them even utilizing the same stock language from the Uniform Guardianship Protective Proceedings Act, or close to it.
Eighteen states do not list any statutory exceptions to the bond requirement, but the remaining states provide exceptions for which a court may or shall dispense with the bond. Twenty states allow exemptions for state officials like sheriffs, financial institutions or other corporate guardians, state-sponsored guardianship programs, and the like. Alabama, for instance, does not require a bond prior to issuing letters of conservatorship to the general conservator or to the sheriff. Seven states provide an exemption for limited guardians, restricted accounts, or an estate with limited assets or one consisting solely of public benefits. Thirteen states created exceptions for guardians nominated by a person who has waived the bond requirement, sometimes specifically by will or a power of attorney. Three states provide exemptions for particular family members. Seven states provide discretionary exceptions, where the court may waive the bond requirement if certain conditions, such as those previously mentioned, are met.
Bonds are used as a tool to ensure guardian and conservator accountability. As stated in an article by Mary Joy Quinn and Howard S. Krooks, which applies to both guardians and conservators:
Judges can “call in the bond” if assets are inadequately managed or actually taken by the guardian. The bonding company will then give the person in guardianship the same amount that was taken or mismanaged and then attempt to collect from the (perhaps former) guardian. Bonds help keep guardians honest. If the guardians fully understand that their own personal assets are at risk, they could be more careful with the assets of the estate of the person in guardianship.
Although some have argued against requiring bonds because it could reduce the pool of people willing to serve and might be a difficult requirement for family members to meet, others have cited the necessity of bonds to make guardians and conservators more accountable.
However, the inquiry ought not to stop here. Some courts may provide additional guidance in their own court rules to make up for the lack of guidance in the statute. Research into those court rules would be the first step to continuing this inquiry. Additionally, sometimes there may be a difference between the statute and practice, providing further complications. As noted in an article by Sally Hurme and Erica Wood, “Guardianship [and conservatorship] practice . . . did not automatically follow changes in law and lofty recommendations,” citing to a study in 1994 that noted deficiencies in court proceedings. Thus, the second step would be to conduct research as to court practices, and whether they conform to statutory requirements and court rules.
Further difficulty arises in determining the actual effect of bond requirements. It may be possible to measure how often judges call in the bonds in different jurisdictions, but even if such a study were to be conducted, it would not reveal the number of conservators or guardians who are dissuaded from misusing the property with which they have been entrusted. Because of this, determining which types of guardian and conservator bond statutes are the most effective for ensuring accountability is incredibly difficult. Further research is needed on the requirements of guardian and conservator bonds set forth in court rules, the court practices regarding those bonds, and the effect that these requirements and practices have on the behavior of guardians and conservators.
For more details, please visit our website to download a complete Conservatorship and Guardianship Bonds: State Statutory Requirements chart. ■