After the passing of your loved one, you may not have expected to find yourself being in charge of settling his or her final affairs. You may have learned that your loved one died without a will or did not appoint an executor even if he or she did create a will. As a result, the court chose an administrator, and you ended up in the position.
Though it may have come as somewhat unexpected, you accepted the role nonetheless. You may feel well equipped to handle the obligations ahead and do not feel that the estate administration process will cause you any undue hardships. Of course, certain elements of the process may seem confusing to you, so it is wise to gain information on the steps you will take during the proceedings, including posting an administration bond.
What is an administration bond?
As the administrator of the estate, you will probably need to obtain a bond from a surety company to act almost like a promise that you will conduct yourself respectfully and in the best interests of the estate as you complete the administration process. In the event that you do not properly attend to your obligations or misuse your power as the administrator, the bond will reimburse the estate for any financial losses that occurred due to any wrongdoing.
Why is an administration bond necessary?
As mentioned, the bond acts as an assurance that the estate will not suffer financially due to the dishonesty or even mistakes of an administrator. The court requires this bond because the administrator will handle numerous financial aspects for the estate, including handling outstanding debts and taxes. If you do not follow the law when working to close the estate, it is possible that creditors for could file a claim against the bond in efforts to obtain funds owed to them.
You may think that the bond will protect you in the event of mistakes, but in reality, if a creditor files a valid claim against the bond and the surety company pays, you have the obligation to repay the surety company.
How can you work toward avoiding mistakes?
If you have concerns about making mistakes that could lead to claims against the administration bond, you may wonder how you can do your best to follow the law and ethically close your loved one’s estate. Fortunately, you can work with a Texas attorney experienced in probate and estate administration who can ensure that you take the proper steps.