Surety Bond Scheme
From 31 March 2016 NSW Trustee & Guardian changed its security requirement. As a result, private managers are now required to obtain a Surety Bond over the managed person's estate if liquid assets are more than $2,000.
A Surety Bond is an agreement between a private manager, NSW Trustee & Guardian and an insurance company. It ensures the estates of privately managed people are secure because a loss to an estate caused by a private manager's mismanagement will be reimbursed by the insurance company.
The fee (premium) for a Surety Bond is paid by the managed person’s estate.
Surety Bond fees
Clients with assets:
- 2,001 to $25,000 – one-off Surety Bond fee of $150
- $25,001 to $50,000 – one-off Surety Bond fee of $350
- over $50,001 – ongoing annual Surety Bond fee charged at 0.4% of the value of estate (excluding funds lodged or invested with NSW Trustee & Guardian, real estate, motor vehicle, furniture, accommodation bond and superannuation for managed people under 65 years)
The maximum level of cover for a Surety Bond is $3 million. If the value of assets, excluding the exemptions, is worth over $3 million, the ongoing annual premium will be capped at $12,000.
Where an estate changes significantly in value the bond requirement will be reviewed.
For most estates, a Surety Bond fee is paid on a yearly basis. The insurance company writes to private managers at the time of a surety bond’s renewal to request payment. However, for small estates, one-off single payments will apply for the lifetime of the order appointing a private manager, unless there is any major change to the size of the estate e.g. receiving an inheritance.
For further information about the Surety Bond Scheme please download the Surety Bond Frequently Asked Questions below. Documents Terms of the Surety Bond and Important Information are available from the insurance underwriter Wills Towers Watson.