Indiana Guardian Fiduciary Duties: Managing a Child's Property and Money

Most relatives filing for guardianship in Indiana are focused on the child's daily care — school, doctors, a stable home. But if the child has money or property, your legal duties expand into financial territory that the court takes seriously.

When Estate Guardianship Applies

You become a guardian of the estate when the child owns assets that need active management. Common situations:

• The child inherited money or property from a deceased parent
• A wrongful death or personal injury settlement was awarded on the child's behalf
• The child receives Social Security survivor benefits or SSI that accumulate
• A trust distribution or insurance payout names the child as beneficiary

If the child has no meaningful assets, you can petition for guardianship of the person only. But if money is involved — even a modest inheritance — the court may require estate guardianship to ensure someone is legally accountable for those funds.

Your Fiduciary Duties

As guardian of the estate, you owe the child a fiduciary duty — the highest standard of care the law imposes. In practical terms:

Conserve the assets. You must protect the child's money and property from loss, waste, or depreciation. This means keeping funds in interest-bearing accounts, maintaining insurance on real property, and not making speculative investments.

Manage prudently. Spending must be for the child's direct benefit — medical care, education, clothing, housing costs attributable to the child. You cannot use the child's funds for your own expenses, even if you're providing the child's housing and food out of your own pocket.

Keep meticulous records. Every dollar in, every dollar out, with dates and explanations. The court will ask to see them.

Watch for conflicts of interest. Under IC 29-3-8-5, a sale or encumbrance of the child's property to the guardian or the guardian's spouse, agent, attorney, or an organization in which the guardian has a substantial beneficial interest — or another transaction affected by a substantial conflict between the child's and guardian's personal interests — is void unless the court approves it.

The Bond Requirement

Under IC 29-3-7, the court may require you to post a financial bond — essentially an insurance policy that protects the child's estate if you mismanage funds. The bond amount typically matches the value of the estate's liquid assets.

Bond is routinely waived for guardianship of the person with no property. But when the estate has significant value, expect the court to require it. Bond premiums are paid from the estate (not your personal funds) in most cases.

If you can't obtain a bond, the court may deny the estate portion of your appointment or impose alternative safeguards — like requiring dual signatures on the child's bank account or restricting withdrawals above a threshold.

Court Reporting: Inventory and Accountings

Under IC 29-3-9, estate guardians face specific filing deadlines:

Inventory: a permanent guardian must file a complete inventory of property subject to the guardian's control within 90 days after appointment. A temporary guardian must file within 30 days. List the property under your control, such as bank balances, real property, securities, and valuable personal property.

Biennial accountings: a permanent guardian must file a written, verified account at least every two years, no later than 30 days after the appointment anniversary. Show income received, expenditures made, and current balances. The court may review the account.

Final accounting at termination: file a written, verified final account within 30 days after the appointment ends. When the guardianship ends at age 18, transfer remaining assets to the now-adult ward.

Common Mistakes That Trigger Removal

The court can remove a guardian of the estate for:

• Commingling funds: mixing the child's money with your personal accounts is the single most common violation. Open a separate account in the child's name with you as guardian.
• Unauthorized spending: using the child's money for household expenses that primarily benefit you, not the child
• Missing filing deadlines: inventory and accounting dates are statutory. Indiana's Guardianship Registry can alert courts about past-due items, but keep your own calendar and follow the court's filing instructions.
• Failing to post required bond: if the court ordered bond and you haven't provided it, you're in violation of the appointment order

Separating Person and Estate Roles

You can be guardian of the person without being guardian of the estate (and vice versa, though that's less common with a single family member). If managing finances isn't your strength, consider whether another family member or a professional fiduciary should handle the estate while you focus on the child's daily care.

Our Indiana Guardianship and Custody Court Process Guide covers both guardianship of the person and the estate, including compliance tracker worksheets for inventory deadlines and accounting requirements.

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