Guardianships of Incapacitated Persons

This class of bond has become one of the more complex to underwrite in the surety industry. There are a number of reasons. One basic reason is that guardianships are usually long term obligations, and there is a greater likelihood that something can go wrong over time.

In order to protect the incapacitated person, sureties have realized that it is critically important to draw the guardianship order meticulously. The order must be drawn thoughtfully and be detailed to prescribe a program suited for the incapacitated person. It should enable the guardian to clearly understand his/her responsibilities and limitations.  Accordingly, boiler plate orders run the risk of providing loopholes that may lead to loss. It may also make it difficult to secure a surety bond, often requiring a return trip to court to amend the order by appointing a more capable fiduciary or to narrow the language.

Where large sums of monies are involved, it is important that all interested parties including guardians; surety companies and their agents; judges; financial institutions that hold and invest the assets; the incapacitated person’s attorneys; court guardianship clerks; court evaluators and court examiners act in concert to enable the system to work. Coordinating that many different parties is a daunting task, but is critical that each of those entities recognize the others’ roles in guardianships. It is even more important that they establish the means to communicate during guardianships to provide the best opportunity for an effective guardianship and to preserve and protect the estate assets.

Kings County, New York took the lead in bringing the aforementioned parties together for a preliminary meeting chaired by Hon. Albert Tomei (Supreme Court, Kings County).  Organized in part by a New York surety agent, the well-attended April, 2006 meeting of which I was part represented an acknowledgment that the attendees need to acknowledge one another’s roles in guardianships. This type of meeting should occur on a wider scale and with greater frequency to address shortcomings and to improve the handling of guardianships.

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