Conservator Surety Bonds
This is a type of court required by Fiduciary Surety Bond. There are three parties to the bond: The Principal-guardian or conservator purchasing bond to guarantee that they will properly manage assets of the conservatee, The Obligee-the state who requires the bond for the benefit of the incapacitated person, The Surety-underwrites and backs the bond.
A court may appoint a guardian and a conservator, or only one of the two.
This applies to guardians (guardians of incapacitated persons - makes personal & healthcare decisions for another adult) & conservators (protection of property of persons under disability - manage financial affairs of another adult). As per Section 45-5-411, NMSA 1978, effective July 1, 2018, New Mexico law now requires all newly appointed conservators, unless the court deems it unnecessary, to secure bonds. Additionally, newly revised annual reports are required to be filed with the courts that provide detailed information about how the conservator or guardian is protecting the assets and healthcare of the incapacitated person.
The bond remains in effect for as long as the conservatorship; the premium is charged annually. The premium is a percentage of the total surety bond amount. You should also consider the attorney fees, filing costs, medical examinations, etc. to prove the need for guardianship. These costs are usually paid from the assets of the conservatee.
Appointment of a Conservator can be made if the court finds that the incapacitated person has a property that may be wasted unless proper management is provided; if the court finds that funds are needed for support, care, and welfare of the person; that protection is necessary or desirable to obtain or provide funds and that the person is incapacitated.
Guardianship cases are handled by District Courts in New Mexico where an alleged incapacitated person resides or is present.
Information Needed For Bond Underwriting
A description of the assets under conservatorship – For example, $200,000 cash and $60,000 real estate. For estates valued over $1,000,000, a breakdown of assets is required. If there are substantial cash assets (over $1,000,000), underwriting guidelines request how assets are being invested to make sure the principal is taking advantage of the FDIC limitations.
Information on any business that is to be continued by the principal - If the conservatee’s business is to be continued by the principal, the principal will receive court approval to do so and provide a copy of the order. Additionally required is information on the principal’s knowledge and experience to operate the business or confirmation the principal has hired a competent individual to run the day to day operation.
As this is a new bond requirement for New Mexico, information on how long the principal has handled the conservatee’s assets.
Will there be formal or informal handling of the estate?
Personal financial statement (template available upon request) and credit history.
Application for a conservatorship and court order for the conservatorship.
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