Bonds, Inventories and the Annual Accounting
A conservatorship is supervised almost entirely through documents. A bond or a restricted account secures the estate at the start, an inventory fixes the opening balance, and every accounting that follows has to reconcile to the one before it or explain why it does not.
The rule in short
Courts require a conservator to furnish a bond or an equivalent verified receipt, sized to the estate plus expected income, unless the court finds security unnecessary. An inventory is due shortly after appointment, commonly within ninety days, with notice to the adult and interested persons. Periodic reports must contain an accounting of receipts, disbursements and holdings, a statement of deviations from the approved plan, and disclosure of benefits received by the conservator or family.
Appointment is the beginning of a filing schedule. A conservatorship is supervised almost entirely through three documents — the security posted at the outset, the inventory that fixes the starting position, and the periodic account that has to reconcile to it. Everything a court later criticizes is visible in one of them.
The security posted at appointment
Most statutes direct the court to require a bond with a surety, conditioned on the faithful discharge of the conservator's duties. The default amount is the aggregate value of the estate plus estimated income for the reporting interval, less property held under a verified receipt that requires a court order for release and real estate the conservator cannot sell without specific authorization.
The court may waive the requirement only on a finding that security is not needed to protect the adult's interests. Several statutes make that discretion unavailable where the conservator is in the business of serving and is being paid, and provide an exception for regulated financial institutions qualified to do trust business. Some also allow a waiver where the estate falls below a modest threshold, on condition that the conservator report any increase.
The alternative that courts use most is the restricted account. Liquid assets are deposited with a financial institution that files a verified receipt agreeing not to release funds without a court order. The effect is similar to a bond at lower cost, and it removes the principal risk without requiring an annual premium from the estate.
The inventory
The inventory is a detailed list of everything in the estate, filed under oath, generally within ninety days of appointment. It sets the opening balance against which every subsequent account is measured, which is why an incomplete first filing causes trouble for years.
Notice of the filing goes to the adult and to persons entitled to notice of the appointment, in many statutes within fourteen days. The conservator must also keep records of the administration and make them available on reasonable request to the adult, to any guardian serving for the same adult, and to others the court designates.
Property discovered later is added by supplemental inventory rather than folded silently into the next account. Where an asset the family expected to see is missing, the inventory is the document that reveals it, and it is a common starting point for the concealed-property proceedings several statutes provide.
| Filing | Typical deadline | Core content | Effect of missing it |
|---|---|---|---|
| Bond or verified receipt | Before letters issue | Security equal to estate plus expected income | Letters withheld; existing letters may be suspended |
| Inventory | Within about ninety days of appointment | Itemized assets with values, sworn | Order to show cause; delay of every later account |
| Care plan or guardian's plan | Set by the appointing order | Residence, services, medical arrangements | Deviation cannot be measured; removal ground in some states |
| Periodic account | Annually in most states | Receipts, disbursements, holdings, plan deviations | Fees denied, surcharge, removal, claim on the bond |
| Final account | On resignation, removal, termination or death | Full period since the last approved account | Discharge withheld; bond remains in force |
A relative serving as conservator deposits the adult's Social Security payment into a joint household account and pays the adult's expenses from it. Nothing was stolen, but no account can be produced that separates the adult's money from the family's. Statutes require records that show receipts and disbursements for the estate alone. Rebuilding a year of mixed transactions retroactively is expensive, and the cost usually falls on the conservator rather than the estate.
What the periodic account must show
The account lists the property in the estate and the receipts, disbursements, liabilities and distributions for the period. Statutes drawn from the uniform act add several items that go beyond arithmetic.
The report must attach the most recently approved plan and state whether the conservator deviated from it, how and why. It must include reasonably available financial statements evidencing the status of accounts and debts, with account numbers redacted. It must disclose anything of more than nominal value that the conservator, a household member, or a close relative of the conservator received from a person providing goods or services to the adult. It must disclose any business relationship between the conservator and a person paid from the estate.
Those disclosure items exist to surface conflicts that a column of numbers would hide — the referral fee, the discount, the contract awarded to a relative. A guardian on the personal side files a parallel report on the adult's condition, residence, services received and the continuing need for the appointment.
Review, objection and approval
Courts review accounts in different ways. Some examine each filing; many operate a monitoring program that screens and refers. Statutes commonly permit the court to appoint a visitor to review the report, interview the adult, or order the estate submitted to examination.
Interested persons receive a copy and may object. The timing matters: approval of an account generally settles what the account disclosed, so an objection to a transaction belongs on the account for the period in which it appears rather than years later. Objections that concern authority rather than arithmetic — a gift or a property sale made without approval — are the ones described in the acts requiring a separate order.
What happens when a filing is missed
The first consequence is usually procedural: an order to show cause why the account has not been filed, sometimes issued automatically by a monitoring program. Continued failure escalates.
Statutes list failure to file timely reports, failure to produce records, failure to maintain bond, and material non-compliance with the report requirements as express grounds for removal. Courts can also deny or reduce compensation for the period, order the fiduciary to pay the cost of a forensic accounting, and enter a surcharge for losses the estate suffered. Where a bond is in force, the surety pays and then pursues the fiduciary.
Compensation is decided in the same place. Fiduciary fees and the fees of counsel are generally payable only as the court allows, on a petition supported by a description of the work. Courts commonly reduce a request where the account was late, where the work duplicated a professional the estate also paid, or where time was spent on a family dispute rather than on the adult's affairs.
None of this depends on a complaint being filed. Monitoring programs in several states screen filings automatically and refer outliers, and a court may appoint a visitor to examine the estate on its own initiative. A fiduciary who assumes that silence from the court means the account was reviewed and approved is usually mistaken; approval is an order, and until it is entered the period remains open.
Removal does not discharge the obligation. A removed fiduciary must still file a final account covering the period served, and the bond stays in force until the court approves it. The sequence from a missed filing to a replacement is set out in removal and the appointment of a successor, and where the underlying problem is that the appointment was broader than the situation required, the answer may instead be a petition to end or narrow the case.
Points to carry away
- The usual bond amount is the value of the estate plus estimated income for the reporting interval.
- Many statutes forbid waiving bond where a paid professional fiduciary is serving.
- A restricted account requiring a court order for withdrawal can substitute for a surety bond.
- The inventory is generally due within ninety days of appointment and must be served on the adult.
- Reports must disclose gifts or benefits the fiduciary or the fiduciary's family received from vendors serving the adult.
- A late or missing accounting can lead to removal, denial of fees, a surcharge and a claim on the bond.
Questions readers ask
Can a family member serving without pay avoid posting a bond?
Sometimes. Statutes commonly let the court waive security where it finds a bond is not necessary to protect the estate, and family fiduciaries with small estates are the usual beneficiaries of that discretion. The same statutes often forbid waiver where the fiduciary is in the business of serving and is being paid. Courts also use a middle option: waive the surety bond but require the liquid assets to be placed in a restricted account that no one can draw on without a court order.
What does the court do with an accounting once it is filed?
Practice varies. Some courts review every account in chambers; others operate a monitoring program that screens filings and flags outliers for a hearing. Many statutes let the court appoint a visitor to review the report, interview the adult, or examine the estate. Approval of an account is significant because it generally settles the matters disclosed in it. That is why interested persons receive a copy and why an objection needs to be raised on the account for the period in which the transaction appears.
Is the adult entitled to see the financial records?
Yes in most statutes, subject to confidentiality provisions that limit public access to the court file. Conservators are typically required to keep records of the administration and to make them available on reasonable request to the adult, to a guardian serving for the same adult, and to others the court designates. Notice of each filed report is also required. Redaction rules usually apply to account numbers and identifying data, but the substance of the account is not withheld from the person whose money it is.
Sources
- Revised Code of Washington § 11.130.445, Bond — Alternative verified receiptSets the bond amount formula and limits the court's power to waive it for paid fiduciaries.
- Revised Code of Washington § 11.130.515, Inventory — RecordsRequires a detailed inventory within ninety days and notice of its filing within fourteen days.
- Revised Code of Washington § 11.130.530, Conservator's report and accounting — MonitoringSpecifies the contents of the report, including plan deviations and benefits received from vendors.
- Revised Code of Washington § 11.130.345, Guardian's report — Monitoring of guardianshipSets the parallel reporting duty on the personal side of the appointment.
- Florida Statutes § 744.3678, Annual accountingRequires an annual account with supporting statements and service on interested persons.
- California Probate Code § 2620, Account of conservator or guardianRequires original account statements and supporting documentation to be filed with the account.
- Florida Statutes § 744.474, Reasons for removal of guardianLists failure to file timely reports and failure to give bond among the grounds for removal.
Metro Law Advisors is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
More in Guardianship
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The Petition, Notice and the Right to Be Present
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