Estate administration is the process of paying the debts of the decedent and distributing assets to the decedent’s beneficiaries and heirs. A representative is appointed by the court to manage the process, and is held accountable by the Probate Court. In addition to meeting the statutory qualifications, in order to serve as a representative the court may require the person to take out a bond to protect the estate. If you are involved in the administration of a decedent’s estate, contact an experienced Chicago estate administration lawyer at the Law Offices of Stephen Bilkis & Associates, as it is important that you understand the rules related to the bond requirement, including the requirements of Illinois Probate Act, section 12-10- Further bond or security.
Bond RequirementA bond is a type of insurance policy. In the case of an estate bond, the purpose of the bond is to protect the estate from negligence of malfeasance on the part of the administrator. With three exceptions, generally a bond is always required. The exceptions are:
A representative is responsible for completing the tasks necessary to settle estate and distribution assets as required by law. If the decedent died testate, then the representative is typically referred to as the executor, while if the decedent died intestate, the representative is commonly referred to as the estate administrator. The first task of the representative is to identify the assets that are part of the probate estate, secure them, and inventory them. This may mean accessing the money in the decedent’s checking and savings accounts as well as the decedent’s investment accounts, if any. The decedent will also be responsible for safeguarding the decedent’s property. This may mean making sure that a house and other real estate are properly secured and insured.
Once the administrator has taken control of estate assets and secured them, the administrator is responsible for paying estate debt. The administrator is also required to pay all valid estate debts to the extent that estate assets are sufficient to pay them. Finally, the last major duty of the executor or estate administrator is transferring estate assets to the decedent’s beneficiaries (if there was a will) or heirs (if there was no will). To learn more details about the job of a representative, contact an experienced Chicago estate administration attorney.
If during this process the administrator decides to steal estate assets or is negligent with them, the estate will suffer a loss. The purpose of the bond is to protect the estate from losses due to the representative failing to fulfill his duties properly.
ExamplesRob was named as the executor of his brother, Charles’ estate. Charles was very wealthy, and had a variety of assets including real estate, personal property, and financial assets. Charles left very little debt. Although the estate had enough asset for Rob to hire professionals, Rob insisted on performing most of the responsibilities himself. In addition, Rob had a full time job. Unfortunately, Rob ended up failing to properly manage the decedent’s investments, resulting in substantial losses. The other beneficiaries named in Charles’ will were upset at the way the Rob had been handling the estate and contacted a skilled estate administration attorney in Chicago to discuss their concerns. Because Rob’s negligence resulted in a loss to the estate, the Probate Court would likely hold him personally liable. However, the bond that Rob was required to secure would be used to cover all or some of the losses.
Further Bond or SecurityAlthough the Probate Court judge will determine the amount of bond prior to the representative’s beginning the administration duties based on the size of the estate, the bond is subject to review throughout the process. There are a variety of factors that may cause the judge to increase or decrease the amount of required bond.
If the letters of administration were issued without the representative providing sufficient bond or security, or if the judge concludes that the bond has become excessive or insufficient, the judge may order the representative to give a proper bond or security. In addition, at each accounting, the judge has a duty to inquire into the sufficiency of the security and bond.
Related Statutory Provisions(a) If letters are issued to a representative without his giving sufficient bond or security or if his bond or the security therefor becomes excessive or insufficient in the judgment of the court, it may on petition of any interested person or on its own motion require the representative to give a proper bond or security.
(b) At each accounting of a representative other than the final accounting, it is the duty of the court to inquire into the sufficiency of the security and of the bond.
Estate administration is the process of settling a loved one’s decedent’s estate. It is managed by a representative, and overseen by the Probate Court. Before a qualified representative can move forward with his (or her) administrative duties, he must follow all of the procedural requirements, including the requirements of Illinois Probate Act, section 12-10- Further bond or security. If you have questions or concerns related to the bond requirement or any other requirements related to the appointment of a representative, talk to an experienced estate administration attorney serving Chicago. The attorneys at the Law Offices of Stephen Bilkis & Associates have over 20 years of experience representing clients in estate matters, including matters related to executors, administrators, guardians, and estate administration. Contact an attorney in our office at 855-454-5529 to schedule a free, no obligation consultation regarding your case. We serve individuals throughout Chicago.