What I Wish I Knew About Estate Administrator Duties

[Ed. Note: Our clients aren’t the only ones with stories to tell. Our families, our staff, and even our business consultants have been grateful for our expertise in times of need. Please enjoy this guest post from Sarah Bacon, our Content Strategist at Baconwood Marketing, about the unforeseen challenges of acting as estate administrator.]

My grandmother first asked me to be her executor in a text message. We got her an iPad for Christmas, and although she was 90 years old, it took her about an hour to become a pro. I said, of course I would. She responded, “TY.”

I’d written for probate lawyers and estate planning attorneys for over fifteen years, so I had some idea of what to expect. Unfortunately, nothing can really prepare you for when the day comes. If you’re considering serving as someone’s estate administrator, here are some important details nobody tells you.

[TABLE OF CONTENTS]

• What Is an Administrator of an Estate?
• What Does an Administrator of an Estate Have to Do?
• What Are an Estate Administrator’s Biggest Challenges?
• Planning Ahead Makes Estate Administration Tasks Easier

What Is an Administrator of an Estate?

The estate administrator is appointed by the probate court to settle an estate of someone who died without a Will (intestate). They perform the same duties as an executor or personal representative named in a Will. My grandmother made a Will naming me as her executor, but I acted as administrator since her estate wasn’t probated (more on this later).

What Does an Administrator of an Estate Have to Do?

It’s the personal representative or estate administrator’s duty to manage and close the deceased person’s estate according to state law. This includes:

• Petition the court to be officially appointed as the administrator
• Formally notify heirs and creditors of estate proceedings
• Locate, secure, and inventory all of the deceased’s assets
• Use estate funds to pay valid debts, final bills, and any taxes due
• Maintain estate property during the probate process (such as keeping insurance current and paying utilities)
• Distribute the remaining assets to rightful heirs after debts and expenses are paid
• File a final accounting with the court and ask to be discharged as administrator to close the estate.

What Are an Estate Administrator’s Biggest Challenges?

It’s hard to predict which of an estate administrator’s duties will be the most difficult. Although my grandmother made an estate plan and told everyone of her wishes while she was alive, there were still some surprises and conflicts to deal with.

Here’s what I learned settling her estate after death:

Will vs Beneficiary Designations vs Joint Owners: Who Wins?

Grandma created a Will for a few specific reasons: she wanted to leave her house to her caregiver daughter, disinherit another child, and ensure any deceased heir’s portion of the estate would be split equally among the rest. Her lawyer created a Lady Bird Deed, instantly transferring the family home and removing the house from the estate. The only remaining valuable assets were her bank account balance and two life insurance policies.

I knew the life insurance check would automatically be sent to the beneficiary listed on the policy, NOT the beneficiaries in the Will. The only designation form in Grandma’s files was over a decade old and listed just one of her children. Another problem was that she and her caregiver daughter shared a bank account, pooling all their money.

Fortunately, the insurance paperwork had been updated three years ago, and the payout went equally to her four heirs. The bank account, on the other hand, had both names on it; legally, all the funds in the account belonged to the daughter. If my Aunt hadn’t agreed to split the funds according to the Will, this could have led to difficult conversations with relatives.

You Work for the Estate (Not the Heirs or Their Children)

Everyone’s hurting after a death, and grief manifests in strange ways. I received calls asking why I wasn’t doing things a certain way, how much money was in [X] account, and concerns that [money-grubbing relation] would swoop in and take everything. Some were from the heirs, but most were from nieces, nephews, and people who saw my grandmother once a year or less.

Remember: You’re not their employee. You work for the estate, and it’s your job to carry out the deceased’s written wishes—period. You don’t owe anyone explanations or details you aren’t required to share. As nicely as possible, I had to tell close relatives —including my own parents and siblings—to back off and let me do my job.

Formal vs Informal Probate

There isn’t just one kind of probate: there’s formal, informal, supervised, and unsupervised probate. Formal probate applies to large estates or cases with property disputes or contested wills. Formal probate is overseen by a judge, but can be either supervised or unsupervised depending on the complexity of the estate and the level of court oversight required. Informal probate is handled by a probate register, so it’s faster and less expensive.

As if this isn’t confusing enough, there’s also a third option: no probate. If an estate is small enough (under $50,000 in Michigan), it doesn’t need to be probated at all. Instead, the administrator fills out an Assignment of Property form at the probate office, submits a funeral bill, and pays a filing fee. The court then assigns assets directly to heirs or creditors, saving the surviving relatives from considerable court costs.

[Note: Probate is required to recognize a Will and officially assign authority to the executor. Since my grandmother left a small estate, I acted as estate administrator with permission from the heirs, NOT a legal mandate. If there had been a dispute, I would’ve had to have the Will probated to have power over estate administration—draining the estate’s finances even further.]

[Editor’s Note: In Florida, the dollar threshold for a summary (small) administration is $75,000, and asset exempt from probate (e.g. homestead) do not count towards that total. Sometimes, a formal probate, with all its procedural requirements, is the best way to go in order to help resolve some of the issues that might be raised.]

Pension Benefits Expire, Retirement Accounts Live On

A large portion of my grandmother’s income came from my grandpa’s auto workers’ pension. After his death, General Motors continued the benefits for his widow for the rest of her life—a policy she had been literally grandfathered into, since GM no longer offers traditional pensions and has upgraded to retirement investment accounts. 

I later discovered that GM had contacted her several times with the option to turn the pension into an investment account, but she never responded. She didn’t realize that investment accounts are inheritable assets, but pension benefits end upon the surviving spouse’s death. If she had opted in, she could have left her children far more than a few thousand dollars.

Planning Ahead Makes Estate Administration Tasks Easier

The most important thing I learned in the process is to finish your homework. Even if you made an estate plan, there are things an attorney can’t do for you, and lawyers are limited to what you tell them. If you need a comprehensive plan that catches mistakes before they happen, email hello@yolofskylaw.com today to get started.