The administration bond is a tool that is commonly used in the distribution of an estate. Here are the basics of the administration bond and what it is used for.
Whenever an estate is going to be distributed, an administrator is appointed in order to accomplish this. The administrator of the estate is tasked with the responsibility of dividing everything up according to the wishes of the deceased. They will refer to the will or other estate planning documents in order to do this. Whenever this happens, there is a chance that they might make a mistake during the process. In order to guarantee that the beneficiaries of the estate will be taken care of properly, the administrator of the will can purchase an administration bond. This bond is designed to make sure that everyone gets the assets that they have coming to them.
When it is Used
This type of bond is not always utilized. It is only utilize whenever an administrator is appointed to an estate. For example, if someone dies without completing a will, an administrator will be appointed to handle the case. This can also happen whenever an individual had an executor of their will but that individual passed away.