Massachusetts 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: Most guardians appointed as fiduciaries in Massachusetts
- Purpose: To ensure the minor or incapacitated adult receives compensation for financial harm if the guardian fails to fulfill their fiduciary duties
- Who Regulates Guardian Bonds in Massachusetts: The probate and family court with jurisdiction over where the minor/incapacitated adult resides or has property
Background
Massachusetts General Law 5-201 and 5-306 requires all guardians to be appointed by a court before assuming their fiduciary duties. The Massachusetts legislature enacted the appointment requirement to ensure that guardians act in the minor or incapacitated adult’s best interests when making decisions related to their health and welfare. To provide financial security for the enforcement of this requirement, most guardians must purchase and maintain a probate surety bond before becoming appointed as a fiduciary.
What is the Purpose of the Massachusetts Guardian Bond?
Massachusetts requires most guardians to purchase a surety bond as a prerequisite to being appointed as a fiduciary over a minor or incapacitated adult. The bond ensures that the minor/adult and all persons interested in their estate will receive compensation for financial harm if the guardian fails to abide by the regulations outlined in Massachusetts General Law 5-208, 5-307, and 5-411. Specifically, the bond protects the minor or incapacitated adult if the guardian fails to adhere to all court orders or mishandles their estate.
For example, if a guardian uses money from the minor/adult’s bank account to pay for the guardian’s personal expenses or mixes the estate’s funds with their own, the minor/adult 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 minor or incapacitated adult if the guardian does not fulfill their fiduciary duties.
How Can an Insurance Agent Obtain a Massachusetts Guardian Bond?
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How is the Bond Amount Determined?
Massachusetts requires that the bond must be in an amount sufficient to protect the estimated value of the minor or incapacitated adult’s real property and personal property. The court will determine the final bond amount required in each guardianship case.
What are the Underwriting Requirements for the Massachusetts Guardian Bond?
Most surety companies will examine the following factors when determining eligibility for the Massachusetts 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 Massachusetts 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 Massachusetts 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?
Massachusetts requires most guardians to purchase a surety bond as a prerequisite to becoming a court-appointed fiduciary. To paraphrase Massachusetts General Law 1-201, a “guardian” is a person who is appointed as a fiduciary to take care of and make decisions for a minor or incapacitated adult. Likewise, a “minor” is a person under the age of 18 and an “incapacitated adult” is an individual who lacks the ability to meet essential requirements for physical health, safety, or self-care.
Guardians are not required to purchase a surety bond, unless explicitly required by the court, if:
- The court determines it is in the best interest of the minor/incapacitated adult to waive the bonding requirement
- A person with the power to nominate a guardian in a will waives the bond requirement
- A health care proxy or durable power of attorney waives the bonding requirement
Guardians can request that the bond is without sureties, with personal sureties, or with the support of a corporate surety bond.
How do Massachusetts Guardians Become Appointed as Fiduciaries?
Guardians in Massachusetts must navigate several steps to become appointed as fiduciaries. Below are the general guidelines, but appointees should refer to the appointment statutes or the state’s guardianship 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
Massachusetts only gives priority for appointment to the nominee of the minor if the minor is at least 14 years old. The court desires to appoint the guardian best suited for the minor and may select a different person for appointment if the minor’s nominee goes against their best interests.
Step 3 – File a Petition for Appointment
Persons seeking a guardianship over a minor must file a petition for appointment with the probate and family 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 ensure they complete the petition in its entirety to avoid delays in the proceedings.
Step 4 – Notify the Appropriate Parties
After submitting the required items to the court, persons seeking guardianship must have another adult, known as a server, notify all of the interested parties involved in the case. The notice must be given to all parties listed in the petition for appointment and any other parties determined by the court, and petitioners can request the county sheriff to serve the notice.
Step 5 – 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 6 – 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:
-
- An individual appointed by the incapacitated adult’s most recent nomination in a durable power of attorney
- The spouse of the incapacitated adult or their nominee
- A parent of the incapacitated adult or their nominee
- Any other person the court deems suitable to be appointed as 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.
Step 3 – File a Petition for Appointment
Persons seeking a guardianship over an incapacitated adult must file a petition for appointment with the probate and family 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 complete the petition in its entirety to avoid delays in the proceedings.
The petitioner must also submit a medical certificate with proof showing that the adult has been examined by a medical professional within 30 days of filing the petition.
Step 4 – Notify the Appropriate Parties
After submitting the required items to the court, persons seeking guardianship must have another adult, known as a server, notify all of the interested parties involved in the case. The notice must be given to all parties listed in the petition for appointment and any other parties determined by the court, and petitioners can request the county sheriff to serve the notice.
Step 5 – 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 adult 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 6 – Purchase a Surety Bond
Unless otherwise exempt, guardians must purchase and maintain a surety bond (limits outlined above).
How do Massachusetts Guardians File Their Bonds?
Guardians should submit their completed bond forms, including the power of attorney, to the probate and family court with jurisdiction over where the minor or incapacitated adult resides or has property.
The surety bond requires signatures from the company that issues the bond and the guardian. The surety company should include the following information on the bond form:
- Court division and docket number
- Legal name, address, and phone number of the entity/individual(s) buying the bond
- Surety company’s name, address, and state of incorporation
- Bond amount
- Type of fiduciary relationship
- Date the bond is signed and goes into effect
- Estimated value of the minor or incapacitated adult’s real estate and personal property
What can Massachusetts Guardians do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, guardians in Massachusetts must ensure that they:
- Perform all of their fiduciary duties
- Obey all court orders
- Do not engage in fraud or misrepresentation