An Administrator is a person appointed by a probate court when an individual dies leaving an estate but no will. An Administrator is appointed to oversee the deceased’s assets.
Managing an estate is hard, detail-oriented work. When you're managing an estate on behalf of someone else, you need to ensure that you are both accurate and ethical.
To help ensure assets are handling properly, the court may require you to secure an Administrator Bond.
What is an Administrator Bond?
An Administrator Bond is a type of court surety bond. An Administrator Bond is a contract that says you will fulfill your duties as an Administrator.
How does an Administrator Bond Work?
The easiest way to understand an Administrator Bond is that it is insurance for others, paid by you.
After you get bonded, it is your responsibility to fulfill your duties as an Administrator of the estate.
- If you perform your duties faithfully and ethically, the Administrator Bond will become null and void.
- If you do not perform your duties, someone can make a claim on your bond.
You can learn more about what would happen if someone made a claim on your Administrator Bond.
How Much Does an Administrator Bond Cost?
The Administrator Bond amount is based on the value of the estate. In some states, the Aministrator Bond amount might need to be greater than the value of the estate.
The actual price (or premium) paid for the Administrator Bond is just a small percentage of the total bond amount.
You can learn more about how the rate is determined here.
If you need an Administrator Bond, you can get one online through Surety Solutions.
Why Would You Need an Administrator Bond?
When someone dies, they leave an estate behind. Sometimes this estate is large, and sometimes it is small. There is always unfinished business such as taxes to pay and accounts to close. Someone needs to be placed in the role of manager of the estate: an Administrator.
Sometimes the estate will need to go through the probate process. Not sure how that works? Check out this post on how the probate process works.
An Administrator Bond is required to safeguard the estate and ensure the wishes of the deceased are carried out as they would have wished.
Ultimately, it is the court's decision whether an Administrator Bond is needed or not. There are some circumstances where an Administrator Bond is not needed.
Times when an Adminstrator Bond is not needed:
- If there is a legal will in place that specifically notes that a bond is not needed
- If a financial institution is made the acting Administrator
A general rule of thumb is that anytime there is no valid will at the time of death, it is very likely the court will require an Administrator Bond.