If you have a loved one who is no longer able to manage their own affairs and finances, you may be considering applying for guardianship in order to help them. You have probably looked into the circumstances under which a guardian can be appointed, but one aspect of guardianship you might be unfamiliar with is the bond requirements for Ohio guardians. If you are unclear about what a bond is or what you need to do, here are the answers to some of the questions we get most frequently in our office, where we offer fiduciary services to guardians.
A guardian of the estate manages financial and business affairs for a ward who is legally incapable of doing so. In order to protect the ward’s financial interests, the guardian must file a bond with the probate court overseeing the case.
The amount of the bond depends on the amount of the ward’s assets. The bond must be for at least two times the amount of the ward’s tangible and intangible personal property plus annual income, which might include rental income, pensions, and Social Security.
The bond amount need not cover real estate in most instances. However, if the guardian intends to sell the real estate on behalf of the ward, the guardian must include the real estate in the bond amount or must apply for an increase in the bond amount.
When a potential guardian applies for a bond, the application will require an estimate of the amount of assets in the ward’s estate. The amount of the bond will be based on that estimate. After the guardian is appointed, he or she must file an inventory of the estate assets that will more accurately represent the value of the assets. Usually, the estimate is pretty close and no change in the bond amount is needed. If the assets are greater in value than initially believed, the guardian may need to apply for an increase in the amount of the bond. If they are less, he or she may apply for a reduction in the bond amount, but only after the first year of guardianship.
No. In Ohio, the bond must be presented to the probate court at the same time as an application for guardianship. An application will not be accepted or considered if bond has not been issued.
A guardianship bond is essentially a type of insurance: insurance that you, the guardian, will not waste or misappropriate the ward’s assets. Guardianship bonds are most often issued by insurance agencies in Ohio, but not all agencies handle this specialized business. Your best bet is to consult an experienced probate attorney who can direct you to an agency that will help you obtain bonding. You are not required to go through any particular agent, but it makes sense to work with an agency that does a significant amount of fiduciary bonding.
It varies by case, but turnaround time is fairly short in most instances. An application is often approved after only a few days. Once an application for bond is approved, the insurance agent signs a bond form, then the applicant signs it, and it is submitted to the probate court.
Under some circumstances, the person who would ordinarily be nominated to serve as guardian, such as a spouse, may not qualify for reasons such as a poor credit history. In that case, the first nominee would waive his or her right to apply and another family member, such as an adult child, might serve as guardian instead. Another possibility would be for an attorney to serve as guardian.
The amount of the premium depends on the insurance agent, the surety (person applying for the bond) and the amount of the bond. The premium is often between 1%-3% of the amount of the bond. For instance, for an estate of $100,000, the premium might be $1000-$3000. However, this is only an estimate.
Yes, for the estate of a legally incompetent adult. Different rules apply regarding bonds for the estate of a minor child.
If you have further questions about bond requirements for Ohio guardians, we invite you to contact Gudorf Law Group to schedule a consultation.
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