When a loved one dies, managing their estate can be complex and emotional. Depending on the circumstances, one of the critical roles involved in this process can be the estate administrator. The administrator of an estate is appointed by a local probate court to oversee the estate administration and manage the estate through the probate process. But what does an administrator do, and how does this role differ from other roles, such as an executor? Understanding the estate administration process is crucial for anyone navigating the difficult task of settling an estate, especially when an administrator enters the picture.
Here’s what you need to know about this unique role!
Related Article: What is the Probate Process?
What Is an Estate Administrator?
It’s imperative to first learn when an estate administrator is appointed because this is often reserved for specific situations. The court will appoint an administrator if:
- The deceased didn’t have a will (also known as dying intestate)
- The will is invalid
- The will has been successfully contested or disputed.
- There isn’t an executor named in the will.
- The executor named in the will has passed away.
In these situations, someone can volunteer to serve as the estate administrator, but they cannot act until the court approves them. If no one volunteers, the court typically appoints the decedent’s next of kin, such as a spouse or adult child.
Still, there’s more to the role of an administrator than that! From the difference between an estate administrator vs. an executor to an estate administration checklist, let’s get into it!
Related Article: Is Probate Needed if There is a Will?
What Are an Estate Administrator’s Duties?
There are several duties an administrator of an estate must be aware of. If you are an administrator, your duties include:
- Obtaining a copy of the will.
- Notifying loved ones of the decedent’s passing and your role in the estate administration process.
- Gathering all assets and documentation, which includes taking an inventory of the decedent’s assets, property, and related documents, such as deeds, titles, and bank account information, and determining their value.
- Taking note of any outstanding bills or debts and compiling a list.
- Issuing a Notice to Debtors and Creditors.
- Identifying income streams and whether they will continue postmortem.
- Notifying Social Security if a funeral director hasn’t done so already to inform them of the death and return any excess payments made by Social Security.
- Paying bills and settling outstanding debts with estate funds.
- Filing an inventory of all assets and debts with the probate court.
- Filing taxes on estate assets, which will also require applying for an Employer Identification Number (EIN) to open bank accounts and make payments on behalf of the estate.
- Providing an accounting to probate court.
- Communicating with heirs and beneficiaries about the estate.
- Distributing assets to beneficiaries or heirs according to the estate plan or state law.
- Petitioning for final distribution.
- Upholding your fiduciary duty throughout the entire process.
These duties and responsibilities are nearly identical to those of an executor, which can lead to people thinking that they are synonymous with one another. However, they are not synonymous, and there are some distinctions between these two roles to be aware of.
Related Article: Does an Executor Have to Show Accounting to Beneficiaries?
Estate Administrator vs. Executor: What’s the Difference?
As we mentioned, you may have heard the terms “estate administrator” and “executor” used interchangeably because they are both responsible for managing and distributing the assets in an estate, but they represent different roles in the estate settlement process.
The main distinction lies in the authority given to each and the circumstances under which they are appointed. Here are some basic differences between them:
- Executor: An executor is typically named in the decedent’s will and is appointed by the probate court to carry out the instructions in the will. Executors typically have more power when handling assets and are responsible for managing the deceased’s assets, paying debts, and distributing property according to the will’s provisions. Executors have more power because they have additional responsibilities that are usually detailed within a will.
- Estate Administrator: If the deceased person did not leave a will (intestate), the named executor is unable or unwilling to serve, or the will has been invalidated, the court may appoint an estate administrator. Estate administrators are generally assigned by the court to handle similar duties as an executor, but their authority comes from the court rather than from the decedent’s will.
In California, the roles and duties of an estate administrator can be pretty similar to those of an executor, but it’s essential to recognize that an administrator has fewer predefined instructions (since there is no will to follow) and often works under closer supervision by the probate court.
In other words, while an executor follows instructions the decedent left in their will, the administrator of an estate will follow state law to determine how assets are distributed.
Related Article: I Have No One to Be the Executor of My Will. What Should I Do?
Can an Estate Administrator Also Be a Beneficiary?
Yes, the administrator of an estate can be a beneficiary. It is common for an administrator to be the beneficiary of an estate because the administrator is often the decedent’s next of kin, such as a spouse or child, who is also usually a beneficiary of the estate.
Does an Estate Administrator Get Paid?
Yes, in most cases, the administrator of an estate receives compensation for their work because this is a time-consuming process.
If the decedent left a will, they may have outlined payment terms for their will executor. However, if they didn’t include payment instructions or if there is no will, the local court will determine compensation according to California state law and the size of the estate.
Can an Administrator of an Estate Sell Property?
Depending on the state law, an estate administrator can sell property in order to pay debts and other costs related to the estate.
Generally speaking, however, administrators do have this power. If the deceased left a valid will, they may have included instructions for which assets to sell. If there isn’t a will, however, the administrator must get approval from the court before selling any property.
It’s also generally advisable to work with a probate attorney throughout the process and communicate with beneficiaries about the sale. This will ensure you are compliant with probate law and minimize the chance of lawsuits or will contests.
Per their fiduciary duty, the administrator of an estate must act in the best interest of the estate and its beneficiaries, so they are forbidden from selling property to benefit themselves.
What to Know About the Estate Administration Process
The estate administration process involves several key steps that must be followed carefully to ensure that everything is handled legally and appropriately. Here’s a breakdown of what estate administrators typically need to know:
- Petition for Appointment: The first step is petitioning the court to appoint an estate administrator. This is necessary when the deceased did not leave a valid will. A petition must be filed with the probate court in the county where the decedent lived, and the court will assess the situation before making an appointment.
- Letter of Administration: You will need more than the court’s approval before you can start managing the decedent’s affairs. You will also need a letter of administration, which are legal documents that prove your authority to act as an estate administrator. This letter will give you legal access to estate assets, like real estate property or financial accounts. You can usually expect to receive this letter after petitioning for appointment, after which time you will attend a court hearing where the judge will evaluate your application and approve or deny your request.
- Inventory of Assets: After appointment, the estate administrator must identify and inventory all assets of the decedent. This includes property, financial accounts, personal belongings, and any other assets that are part of the estate.
- Paying Debts and Taxes: One of the most significant tasks is to pay off the decedent’s outstanding debts. This could include credit card bills, loans, and any taxes owed. As an administrator, ensuring that all debts are settled before distributing assets is crucial.
- Final Distribution of Estate Assets: Once debts and taxes are paid, the administrator must distribute remaining assets to heirs or beneficiaries as determined by California intestacy law. In the absence of a will, California’s laws of intestate succession govern who receives what portions of the estate.
- Final Accounting and Court Approval: The administrator must provide the court with a final accounting that outlines all financial transactions made during the estate administration process. Once the court approves the accounting, the estate can be closed.
The process can be lengthy and requires attention to detail at every step. As we mentioned, an estate administrator must also ensure that all actions are in compliance with California’s probate laws throughout this process.
What to Know About Probate and Estate Administration
Probate is the legal process that validates a deceased person’s will (if they have one) and oversees the distribution of their estate. The estate administration process often occurs within probate, but there are important distinctions between the two.
- Probate generally refers to the court-supervised process of validating the will, paying debts, and distributing assets. It can take several months (or even years, in complex cases) to complete.
- Estate Administration, on the other hand, is the day-to-day management of the estate’s assets, payments, and distributions. An estate administrator works under the supervision of the probate court but is primarily responsible for the practical aspects of handling the estate.
Understanding how probate and estate administration work together is essential for anyone involved in the administration of an estate.
Probate ensures that the decedent’s wishes (or the state’s default rules if there’s no will) are respected, while estate administration involves carrying out the steps necessary to fulfill those wishes.
The Estate Administration Checklist
Navigating estate administration requires careful attention to detail. To help guide you through the process, here’s a checklist of key tasks to remember:
- Obtain a death certificate: This is essential for accessing the decedent’s financial accounts and assets.
- Petition the court for appointment: If no executor is named in the will, petition the court to appoint an estate administrator.
- Notify creditors and beneficiaries: Inform all creditors of the decedent’s death and notify heirs or beneficiaries.
- Inventory the assets: Make a comprehensive list of all the deceased’s assets and liabilities.
- Settle debts and taxes: Ensure all debts are paid, including any estate taxes.
- Distribute assets: Once debts are settled, distribute the remaining assets according to the will or, if there is no will, according to California law.
- File a final accounting: Submit a detailed accounting of all financial activities related to the estate to the court for approval.
- Close the estate: After court approval, the estate can be officially closed.
This checklist is just a starting point—each estate is unique, and the tasks required may vary depending on the complexity of the estate and the decedent’s wishes.
Here’s a quote with an analogy that can add some “juice” and make the topic of estate administration more relatable:
“Estate administration is like completing a complex puzzle. The estate administrator is tasked with fitting the pieces together—gathering the assets, paying debts, and ensuring everything fits within the framework of the law. Without the right person overseeing this process, the puzzle can remain incomplete, leaving important pieces misplaced or forgotten.”
– Marcia L. Campbell, CPA & Professional Estate Administrator
Do You Need Estate Administration Services? Always Work with a Professional Estate Administrator in California!
Navigating the estate administration process can be overwhelming, especially during a time of grief. Whether you’re an appointed estate administrator or a beneficiary trying to understand the process, working with an experienced professional can help ease the burden. At Marcia L. Campbell, CPA, we specialize in guiding clients through the complex estate administration process and navigating California’s daunting probate system.
Don’t face the estate administration process alone. You need expertise and guidance to ensure that your loved one’s estate is handled with care and in full compliance with California law.
