Introduction
As an insurance agent specializing in probate court bonds, I’ve encountered a variety of situations and requirements that can be both complex and costly. However, if there’s one type of bond I’d rather avoid issuing, it’s the minor guardian bond. In this blog post, we’ll delve into the reasons why minor guardianship bonds can be particularly challenging and discuss the importance of considering alternatives before committing to them.
The Costly Commitment
Minor guardian bonds are a unique type of bond that can pose a significant financial burden. These bonds are required to be paid until the minor reaches the age of 18, which means they can extend over many years. Let’s illustrate this with an example: Imagine a one-year-old child inheriting $10,000. In such a case, the court often requires a bond with a value of at least 2 times the inheritance, starting at $100 per year.
Now, here’s the kicker: Since the child is only one year old, the bond must be maintained for 17 more years until the child reaches adulthood. This amounts to a staggering $1,700 in total premiums. While some bonding companies may offer discounts after the first year, perhaps around 30%, that still leaves a substantial financial obligation of approximately $1,200.
Exploring Alternative Solutions
Given the significant cost associated with minor guardian bonds, it’s crucial to understand that there are often alternatives available that can alleviate some of the financial burden on the child’s estate. As an insurance agent, I emphasize the importance of thoroughly exploring these options before deciding to issue a minor guardian bond.
1. Custodial Financial Accounts: One alternative worth considering is setting up a custodial financial account for the minor. In this arrangement, a designated custodian manages the funds on behalf of the child until they reach the age of majority. While this doesn’t entirely eliminate the need for a bond, it can reduce the bond amount required, potentially making it more manageable for the estate.
2. Court Variations: Different courts in various jurisdictions and states have their own rules and regulations regarding minor guardianship bonds. Some may be more flexible and open to alternative arrangements, such as placing funds in a trust or using an annuity to ensure the minor’s financial well-being. It’s essential to consult with an attorney who specializes in probate and guardianship matters to explore the options available in your specific jurisdiction.
Additionally, it’s important to note that even after a minor guardianship bond is issued, the bond premium after the first year is pro-rated and refundable if the court orders any changes. So, if the court ever issues an order reducing or eliminating the bond requirement before the bond expires, after the first year, you’ll receive a pro-rated refund.
Conclusion
While minor guardian bonds can be a daunting financial commitment, it’s crucial to remember that there are often alternatives available that can alleviate some of the financial burden on the child’s estate. As an insurance agent, my priority is to help my clients navigate these challenges and find the most suitable solution for their specific situation.
If you find yourself facing the requirement for a minor guardian bond, I strongly encourage you to consult with a knowledgeable attorney and explore all available options before committing to the bond. By exhausting all alternatives first, you can make a more informed decision that best serves the child’s interests and minimizes the impact on their inheritance. And, remember, there is the potential for a pro-rated refund if the court ever modifies the bond requirement.
How to apply for a minor child guardianship bond
Our agency issues more probate court bonds in a week than most agents in a year. We offer online applications, quick response times, and the best pricing available. Apply online for a guardianship bond or Download PDF Probate Guardians Bond Application.
