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How Should you Respond to a Request to Waive Bond, Inventory and Accounting in a Tennessee Estate?

Posted on Jan 25 2015 12:20PM by Attorney, Jason A. Lee

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.

 

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Under Tennessee law is a bond required of a personal representative (executor or administrator) of an estate?

Posted on Mar 22 2013 1:00PM by Attorney, Jason A. Lee

Generally, the court requires that personal representatives provide a bond before the court will give testamentary letters or letters or administration to administer the estate.  However, under certain circumstances the bond requirement will be waived.  T.C.A. § 30-1-201 provides specific circumstances where a bond is not required including the following:

 

(a)(1) The clerk shall not require a bond of the personal representative before issuing letters testamentary or letters of administration if:

(A) The decedent by will excuses the personal representative from making bond;

(B) The personal representative and the sole beneficiary of the estate are the same person and the court approves;

(C) All of the beneficiaries of the estate are adults and all of them consent in writing to the personal representative's serving without bond and the court approves; or

(D) The personal representative is a bank that is excused from the requirements of bond by § 45-2-1005.

 

Even if the bond requirement is waived using one of these exceptions, if the personal representative is "wasting, or likely to waste, the estate" the court can require a bond in an amount that it deems advisable under this statute.  T.C.A. § 30-1-201(b) provides as follows: 

 

(b) Any interested person may petition the court to suggest and show that the personal representative is wasting, or likely to waste, the estate. In this event, the court may require bond in an amount it deems advisable.

 

The next question is what bond amount is required if no exceptions found in T.C.A. § 30-1-201 apply.  The statute provides that

 

(2) If the preceding exemptions from making bond do not apply, the clerk, before issuing the letters, shall take from the personal representative a bond payable to the state, with two (2) or more sufficient sureties or one (1) corporate surety, in an amount determined by the court. If bond is required, the bond shall not be less than the value of the estate of the decedent subject to administration nor more than double the value of the estate and the court may increase or decrease the amount at any time by order.

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Jason A. Lee is a Member of Burrow Lee, PLLC. Contact Jason at 615-540-1004 or jlee@burrowlee.com for an initial consultation on wills estate planning and probate issues.

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Tennessee Wills and Estates Blog
Jason A. Lee, Member of Burrow Lee, PLLC
611 Commerce Street, Suite 2603
Nashville, TN 37203
Phone: 615-540-1004
E-mail: jlee@burrowlee.com

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