What Is an Administrator?

An administrator is a court-appointed individual who handles all remaining financial matters for a decedent—a person who has died—during probate.

The administrator organizes all the pieces of the decedent's estate and then settles outstanding debt, expenses, and other obligations. They also distribute all remaining assets according to the decedent's will, or if there was no will (a situation called 澳洲幸运5官方开奖结果体彩网:intestacy🧸), acco൩rding to a specific state's intestate succession laws.

Understanding the Role of Administrators

An administrator is also referred to as an executor. However, legally speaking, an administrator is appointed by a court when a decedent has not named an executor in their will or if a named executor refuses or is unable to assume the responsibilities. A court cannot force a named execut☂or to fulfill their duties.

Depending on the state, a decedent's estate administrator is chosen based on different criteria. For example, one of the criteria specified in the state of Pennsylvania's probate code is that the administrator is chosen based on the size of their interest in a decedent's estate rather than their closeness𓂃 with the deceased.

Other persons who may be considered are guardianship agencies (in cases where the decedent was incapacitated) or creditors. Persons under 18 🌟years of age, corporations, and individuals who have an unfit background (such as a criminal record) are not cꦚonsidered when appointing an administrator.

The probate proceeding begins with the selecti🌄on of the adminis𝄹trator. Once appointed, the administrator receives Letters of Testamentary issued by the court, authorizing them to discharge outstanding financial matters.

An administrator is compensated for their services based on the quality of their work and results. They are requ🐽ired to submit a detailed accounting of time spent and fee expenses to get paid. Professional administrators are also available for hire. These administrators generally charge a fixed fee for their services but may negotiate their rates for estates that are in excess of $1 million.

Administrator Duties

One of the first things that an administrator must do is obtain a tax identification number so they can file with the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS). Then, the administrator is ta🍷sked with gathering up all of the documents and personal files that encompass the financial dealings and transactions of the decedent: bank account records, brokerage statements, credit card statements, insurance claims, tax notices, medical expense invoices, vehicle financing statements, etc.

If the decedent owned a business, the administrator takes legal title to the assets of the business and must hire a third-party appraiser to value the assets before the administrator liquidates them, pays all the business's liabilities, and finally, closes the business down. Independent valuation services must also be retained to ascertain fair market prices for real estate, art, or other illiquid personal assets.

The administrator determines if there are any tax obligations with federal and state authorities and settles them, in addition to settling any liabilities with other parties that had outstanding claims when the person died. An administrator must take particular care to clear out all of the decedents' tax claims because they can, in certain instances, be held personally responsible for unpaid taxes. 

After all debts and expenses have been settled, any remaining assets are distributed by the administrator to named beneficiaries in a will. If th🍃ere was no will left behind by the decedent, the assets are distributed in accordance with state procedure.

Simple probate cases may take just a few months, while complex cases can take two to three years🔯 before they are concluded.

Other Types of Administrators

The term "administrator" is a common word with different meanings depending on the situation. Some uses are as follows.

Pension Plan Administrator

A pension plan administrator is an individual or an investment management company that is responsible for🙈 the management of a retirement account or pension plan.

The plan administrator ensures that the funds are ꦦinvested appropriately and with the right degrees of risk as well as distributing funds to the beneficiaries.

Some of the responsibilities of a pension plan administrator include enrolling company employees, calculating the benefit amounts, and ensuring that the funds are being invested in risk-appropriate assets.

Third-Party Administrator

A 澳洲幸运5官方开奖结果体彩网:third-party administrator is any company that provides specific services on behalf of another company. A third-party administrator is one that is usually hired to complete operational tasks, including the administration of employee benefits, such as a 澳洲幸运5官方开奖结果体彩网:401(k) plan.

Third-party administrators are far-ranging in their types but can be contracted to assist with health insurance, commercial liability insurance, 澳洲幸运5官方开奖结果体彩网:retirement planning, other investment servic🔥es, and audits. Third-party administrators are primarily used by companies as a way to outsource a variety of 🧜administrative functions.

State Administrator

A state administrator is a government representative who enforces state regulations related to the securities industry. The 澳洲幸运5官方开奖结果体彩网:Securities and Exchange Commission (SEC) enforces federal securities law while the 澳洲幸运5官方开奖结果体彩网:Uniform Securities Act allows states to set their own laws.

A state administrator performs many of the sꦆame actions as the SEC, such as regulating companies and individuals, granting or suspending licenses, and genera🦹lly enforcing securities law.

Example of an Administrator

Dmitri died without leaving a will and he had no surviving spouse or children. When he heard about Dmitri's death, Malik contacted the court to be appointed as his administrator. Malik applied to be Dmitri's administrator because he was a creditor to Dmitri and had loaned him funds amounting to $50,000 oꦉver the years.

Once the court approved his application, Malik set about finding more information about the state of Dmitri's finances. He inquired with Dmitri's bank and combed through his previous tax filings. Malik discovered that Dmitri did not have much money in his account but he did have a property holding that could help pay off his loan. He petitioned the court to sell off the property, settled Dmitri's tax liabilities, and paid off the remaining creditors. He was also compensated by the court for his work.

The Bottom Line

An administrator manages various financial matters during probate for a decedent, an individual who has died. Typically appointed by the court, the administrator processes the decedent's debt and distributes their assets to their beneficiaries.