[DwightMitchell]

Hello,

I live in New Jersey, and obtained a guardianship bond. They wording of the joint-controled was flawed and the bank will not honor it because the attorney was not listed as a co-guardian.

I was wondering if you sign a Bond / Indemnity Agreement and the Surety turns around and asks you to sign a Joint-Control Agreements, is this considered two separate agreements or contracts?

That is, if the Joint-Control Agreement gets invalidated because of errors or ommissions does the Bond / Indemnity Agreement get cancelled also and the bond revoked?

The Joint-Control Agreement was a requirement for getting the Bond / Indemnity Agreement. But I still signed two separate agreements.

If you have any case law regarding primary contracts base upon the stipulation of a second contract please let me know. I am getting several different responses and before I hire an attorney I must feel confident that he can will my case.

Thanks

Dwight

[RichardBondMan]

I have written many surety bonds such as this. Another name for these bonds are probate bonds. Many surety (insurance) companies require that probate bonds, especially for guardians and conservators of estates, be written with the understanding/agreement that an attorney will exercise control over estate assets by signing or in some fashion "jointly controlling" all estate assets along with the principal (the guardian or conservator). Society has changed so much in the last few decades that sureties are experiencing losses on these bonds because principals erroneously consider estate assets as their own and are misappropriating, embezelling or otherwise mishandling assets that lawfully belong the estate. Also attorneys are (or should be) trained on what is lawful and was is not. If I can give a real life example, it might be more useful... here's one example... a child is bitten or mauled by a neighbor's dog, the parents file suit and recover from the owner of the pet and the monies lawfully belong the child. The child is a minor and minor's are not legally able to handle sometimes large sums of money that lawfully belongs only to them not their parent or parents. The law in most states requires the posting of a non cancelable surety bond usually at least two or three times the amount of the sum recovered depending on the age of the minor and the laws of the particular state. The purpose of the bond is to guarantee that funds will be safe from the improper acts or even omissions of the guardian or conservator. A joint control agreement provides some assurance to the surety that the funds will be properly handled according to state probate laws since an attorney would normally be trained in such matters and also would be normally considered trustworthy. You made several statements and asked several questions so let me try to answer each question raised by necessarily having to make several assumptions. First, probate bonds cannot be canceled once filed with the court without the court's approval. The reason for this is that the estate must be protected, therefore, once filed with the court, only the court can release the principal from fiduciary responsibilities and allow the surety to be released from responsibility. Second, I do not understand your statement "They wording of the joint-controled was flawed and the bank will not honor it because the attorney was not listed as a co-guardian" - perhaps you mean the wording was flawed and therefore, the bank cannot accept the joint control agreement as worded ? I do not think the bank is rejecting the agreement simply because the atty was not listed along with the person being bonded as guardian because he should not be listed as co-guardian with the court. In my opinion, it would be highly unusual for the atty to be listed with the court as a co-guardian. If there is an atty reading this and I am incorrect, I apologize and stand corrected. Now as to your question concerning the indemnity agreement the surety normally requires and the joint control agreement, those are two separate agreements. An indemnity agreement simply requires that should the person being bonded default on the bond and do something illegal or in violation of probate law that causes the surety a loss, then the person being bonded will pay back those monies to the surety to include atty's fees spent to collect monies misappropriated. The joint control ageement I explained earlier is a separate agreement that is on file with the bank or financial instution and simply means that all transactions on an account belonging the estate will be signed not only by the guardian/conservator but the atty exercising joint control with the guardian/conservator. I see no need to hire an atty to attempt to invalidate the indemnity agreement, the bond is on file with the court I am assuming and cannot be canceled and the surety has "common law" rights of indemnity from you even if you never sign an indemnity agreement --- the surety just normally cannot include atty's fees in the suit againt you should you default on the bond, Why not ask the surety to prepare another joint control agreement that fulfills the requirements of the bank or financial institution or should I be incorrect in assuming that the atty need not be named as co-guardian, file a petition with the court asking that the atty be named as co-guardian. Be prepared for the atty to strongly object - he wants to be an attorney not a co-guardian of an estate and honestly, most atty's do niot want to be bothered with having to sign ck after ck or every transaction regarding accounts set up for the estate - they want to practice law. Please let me know if I can be of any further assistance. I am not an atty but do have experience boht as an agent and underwriter of these types of surety bonds. You may wish to review my profile also.

[John Mulchery]

Joint control agreements will not be honored by banks because Federal banking laws only allow access and control to the executor or guardian.

In other words, why would a bank allow a non-executor or non-guardian to sign ANYTHING on an account? Banks have compliance rules and the good ones comply.

If the court did not appoint the person as a co-guardian / co-administrator or co-executor, the attorney has NO legal right to act on ANY account of the estate. Would you allow joe schmoe to sign estate checks if he was not appointed by the court? I think not.

If your surety is asking you to sign a joint control agreement, DON'T. Run to the first available probate judge and inform him of the illegal request.

The request is nothing more than an illegal attempt to reinsure the risk NOT with an reinsurance company. Each state has different rules re reinsurance but most ONLY allow reinsurance with a reinsurance company.

The ONLY available option to the surety is to tell the court that it will not insure, and that ti wants a co-executor or co-guardian, or a trust company. The decent sureties will do this and the court orders the accounts to be placed with trust companies. The bad sureties don't tell the court so they can collect the commissions and ask for joint control where one is not allowed by law.

In most states, the court can ONLY order the money to a trust company or to blocked accounts. No other options are available in most cases where the principal is not insurable.

If your surety agent tells you to sign it, he's trying to trick you into taking the risk off him. Most surety agents are also the underwriters for the surety bonds.

Sureties are suing lawyers left and right and trying to get them to act as an indemnitor without having signed an indemnity agreement. This is also illegal and fraudulent in my opinion.

The above is not intended to be legal advice and is merely my opinion. You should contact an attorney in your state to advice you.