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Sometimes when a Tennessee probate estate is
opened up, the attorney handling the estate will provide a request to the
beneficiaries to waive bond, inventory and accounting [“Bond” is basically an insurance
bond to protect the assets of the estate if there is a failure by the
executor. “Inventory and Accounting” are
required reports to beneficiaries and the court on the financial status of the estate]. This may be unnecessary in some circumstances
if it is actually already waived in the will by the decedent. However, sometimes wills do not include this
language. Or, many individuals die intestate
(without a will). I often get asked by
beneficiaries who receive a request to waive bond, inventory and accounting as
to whether they should agree to this request.
When I personally handle estates as the estate attorney I also send out
these same letters to beneficiaries on many occasions.
The short answer on how to handle this
situation (and the advice I give to others) is that if the individual is a
family member and you trust them to handle the estate appropriately, then I do
not see any issue with waiving bond, inventory and accounting. This is especially true with smaller
estates. However, if there is an estate
of a significant size and you have any issues of doubt, hesitation or trust concerning
the individual who will be handling the estate, then I suggest
that you not waive bond, inventory or accounting. Refusing to waive these items can force the executor
to be more accountable for their actions in the estate (by requiring them to provide
financial updates under the statute).
There is no perfect answer to this question
but certainly if you do not trust the individual who will be handling the
estate, then I recommend you not agree to waive bond, inventory or accounting. Further, if the individual is someone who is
not a family member and it is a sizeable estate, you also need to think long
and hard about whether it is appropriate to waive bond, inventory or
accounting. Keep in mind however, that
when you do not waive these items, it does increase the cost of estate
administration (the insurance bond costs money and the inventory and accounting
increase the paperwork and fees of the attorney handling the estate). Also, if you do not feel comfortable waiving
the bond, inventory or accounting, then I would also recommend that you hire an
attorney to represent you as a beneficiary in the estate. This gives you more of a voice in the estate
administration process and also provides you with someone who can give you
counsel on what is occurring in the estate.
Follow me on Twitter at @jasonalee
for updates from the Tennessee Wills and Estates
blog.
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