Detailed Answer
Short answer: Under Indiana law, a personal representative (administrator or executor) generally must obtain a fiduciary bond unless the will expressly waives the bond or the court orders a waiver. Heirs or interested parties may also ask the court to require or waive a bond. Whether a bond can be waived by agreement among family members depends on how the estate is opened and what the court approves — a private agreement alone usually will not remove the court’s authority to require a bond.
What a fiduciary bond does
A fiduciary bond (often called an administration or probate bond) protects the estate and creditors if the personal representative mismanages assets, steals funds, or otherwise breaches fiduciary duties. The bond is a contract with a surety company that guarantees payment to the estate up to the bond amount if the representative fails in duties.
When Indiana courts typically require a bond
- When an administrator or executor is appointed for an intestate estate (no will) or for a will that does not waive bond.
- When the court believes the estate or the appointed person presents a risk to creditors or heirs.
- When the surviving spouse or heirs request protection through a bond.
When a bond can be waived
There are three common ways a bond is not required:
- Will provision: A valid will can expressly waive the requirement for a bond for the person named as personal representative. If the will waives a bond, the court generally follows that instruction unless there is reason to doubt it or protect creditors.
- Court order: The probate court has discretion to waive the bond if it finds waiver is appropriate given the estate’s size, the representative’s relationship to beneficiaries, or other protections (such as secured assets or limited duties).
- Statutory or local rules: In limited circumstances the legislature or local rules may allow alternative procedures or reduced bond requirements.
Can all heirs simply agree to waive the bond?
Not solely by private agreement. Even if all heirs agree, the court must approve the appointment and retain authority to require a bond. In practice, if all heirs sign a written waiver and file it with the court asking the court to waive the bond, the judge may accept that waiver and dispense with the bond — but only after the court reviews the request and the circumstances. Creditors’ rights are a key concern; a court will not allow a waiver that would unfairly prejudice creditors.
Practical steps to seek a bond waiver in Indiana
- Check the will: If a will exists, confirm whether it expressly waives bond for the named personal representative.
- Talk to the probate clerk: Local probate procedures and forms vary by county. The clerk can tell you what the court typically requires and what forms to file.
- File a petition: When opening the estate, the petitioner can ask the court to waive the bond and submit any written waivers from heirs or beneficiaries.
- Provide protections the court can accept: Examples include inventorying assets promptly, asking for a limited bond instead of no bond, or providing security for specific high-risk assets.
- If required, obtain a bond: If the court requires a bond, contact an insurance agent or surety company that issues probate bonds. The premium is usually a percentage of the bond amount.
Amount of the bond and who sets it
The probate court typically sets the bond amount. Courts commonly set the bond to equal the estate’s gross value or some fraction that protects creditors and beneficiaries. The court can adjust the amount upward or downward based on estate complexity or protections offered.
Consequences of not posting an ordered bond
If the court orders a bond and a personal representative refuses or fails to post it, the court can deny letters of administration or remove the appointee. Failure to follow court orders may lead to appointment of another representative and possible personal liability for any losses the estate suffers.
Where to read the law
Indiana’s probate rules and statutes appear in Title 29 of the Indiana Code. For the general structure of probate law and to locate specific provisions about fiduciary bonds, see the Indiana General Assembly’s code collection: https://iga.in.gov/legislative/laws/2024/ic/titles/29. For county-specific procedure and court forms, check the local probate court or the Indiana Courts self-help resources (local probate clerks can also guide filing procedures).
When to talk to an attorney
Consider consulting a probate attorney when: the estate has significant assets, there are potential creditor claims, heirs disagree, or the personal representative wants to waive the bond but creditors may object. An attorney can draft filings to present to the court and explain risks and protections.
Helpful Hints
- Do not rely on an informal family agreement alone. File any waiver(s) with the court and obtain a court order waiving the bond.
- If you expect disputes or creditor claims, expect the court to require a bond or other protections.
- Get a written inventory and periodic accounting if the court waives a bond; those records protect both the representative and beneficiaries.
- Ask the probate clerk which forms your county uses for bond waiver requests so you can file correctly the first time.
- If a bond is required, compare quotes from multiple surety agencies — premiums vary with the bond amount and the principal’s credit history.
- Keep beneficiaries informed. Transparency reduces the chance that someone will move to require a bond later.
Disclaimer: This article explains general Indiana probate principles and is not legal advice. Laws and rules can change and courts apply statutes to specific facts. For advice tailored to your situation, consult a licensed Indiana probate attorney or contact the probate clerk in the county where the estate would be opened.