DEFINITION of Administrator
An administrator is a court-appointed individual who handles all remaining financial matters for a decedent during probate. The administrator organizes all the pieces of the decedent's estate, and then settles outstanding debt, expenses and other obligations and distributes remaining assets according to the decedent's will, or if there was no will (intestacy), according to a specific state's intestate succession laws.
BREAKING DOWN Administrator
An administrator is also referred to as an executor, but legally-speaking, an administrator is appointed by a court when the decedent has not named an executor in his or her will or if a named executor refuses or is unable to assume the responsibilities. A court cannot force a named executor to fulfill the duties. The probate proceeding begins with the selection of the administrator, who will receive Letters Testamentary issued by the court to authorize the individual to discharge outstanding financial matters.
One of the first things that an administrator must do is obtain an tax identification number for IRS filing purposes. The administrator then begins gathering up all the documents and personal files that pertain to all financial dealings and transactions of the decedent. Bank account records, brokerage statements, credit card statements, insurance claims, tax notices, medical expense invoices, automobile financing statements, etc. are all organized. 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 liabilities and closes the business down. Independent valuation services will also be retained to ascertain fair market prices for real estate, art or other illiquid personal assets.
The administrator takes care of all tax obligations, if any, first with federal and state authorities, then settles liabilities with the other parties that had outstanding claims when the person died. An administrator will take particular care to clear out all tax claims because he or she can, in certain instances, be held personally responsible for unpaid taxes. After those debts and expenses are dispensed with, any remaining assets are distributed by the administrator to named beneficiaries in a will or in accordance with state procedure if there was no will left behind by the decedent. Simple probate cases may take just a few months. Complex cases could take two to three years before they are concluded.