When you are named the executor of estate assets and debts for a family member or loved one in Michigan, the position is called a Personal Representative. In this role, you are bound by important legal obligations. Depending on the size and complexity of the estate, your role as estate executor may be complicated and time-consuming or fairly straightforward.
Part of your responsibility is to file the will and open a probate estate to distribute the estate assets and pay debts. You may also incur certain expenses on behalf of the estate so it’s important to know which executor of will expenses may be reimbursed by the estate. Most states allow expense reimbursement for estate executor duties, but not all expenses qualify.
How Executor Expenses May be Incurred
An estate executor oversees the estate of the deceased person, also known as the decedent. Executors must distribute estate assets according to the decedent’s instructions and pay debts associated with the estate. Executors may need to:
Make funeral arrangements,
Manage real estate, make repairs, pay utilities, or sell the property,
Resolve tax issues including estate tax, income tax, real estate taxes, and more,
Communicate with the beneficiaries about the probate process, and
Work with a probate attorney to administer and finalize the estate.
In general, estate debts may include funeral home bills, mortgage installments, realtor commissions, tax obligations, and attorney’s fees. While some payments qualify as executor reimbursement expenses, others will not. Before you pay any estate-related costs, consult with a knowledgeable probate attorney at Barron, Rosenberg, Mayoras & Mayoras to be sure.
Executor of Estate Expenses That May be Reimbursed
When an estate enters probate, the executor can begin paying related costs and debts from the estate assets. However, an executor may incur some expenses before the legal process starts. Sometimes the executor or a family member must pay costs with their own funds and request reimbursement from the estate later.
For example, funeral expenses are one of the first executor of will expenses you’ll likely face. Some funeral homes will wait for probate to collect their invoices, but others may require immediate payment. From the start, it’s important to understand which estate debts can be reimbursed.
In general, executors can request reimbursement for these estate expenses:
Funeral and burial or cremation services including all preparation costs, casket or urn costs, cemetery fees, obituary publication, and more. These expenses are the estate’s first priority before any other creditors are paid.
The reasonable costs associated with administering the estate including court costs, filing fees, and other expenses related to probate.
Professional fees charged by accountants, realtors, appraisers, auctioneers, and other necessary experts.
Real estate maintenance costs to keep the home in good condition including payments for utilities, lawn care, pool maintenance, and reasonable repairs. Also, mortgage payments and real estate taxes must be kept current until the property is transferred or sold.
Property sale expenses including broker fees, appraisals, surveys, staging the home, and more. If there is an estate sale, the selling company’s fees are also paid by the estate.
If a pet was left behind by the decedent, all related costs to care for the pet are the estate’s responsibility until arrangements are made for the pet.
The executor’s reasonable transportation costs if they must travel to transact necessary business related to the estate. These expenses may include mileage reimbursement or flights and car rental. If the executor lives out of state or in a different country, the probate court may require the executor to post a bond or appoint a local, in-state agent to manage the estate in the executor’s absence.
The cost to obtain death certificates because the executor of estate assets and debts must have this document to fulfill their duties.
Income, estate, real estate, inheritance, and other taxes will be paid from the estate assets.
Attorney’s fees to help ensure the estate is properly administered. Also, if the estate is sued, the personal representative is entitled to reimbursement of legal fees to the extent the fees are incurred in good faith.
As the executor, you should be cautious when incurring debts on behalf of the estate. For example, an extravagant funeral could reduce the amount of inheritance received by the beneficiaries who may challenge your decisions in court.
Also, carefully consider whether proposed real estate repairs will add equity to the property upon sale or if the money would be better spent elsewhere. An experienced probate lawyer can offer sound advice about paying estate expenses.
Executor of Estate Expenses That May Not be Reimbursed
Not all costs that appear to be related to an estate are allowed by the probate court. For example, although funeral and burial expenses are covered, some other costs may not be reimbursed to the person who pays for them. Also, the family and friends attending the funeral cannot normally request reimbursement for their travel expenses, hotel room, or meals.
Also, other expenses incurred before the decedent’s death may not be reimbursed by the estate. For example, if you helped clean out the decedent’s home or paid a company to move their personal belongings before they died, you might not receive reimbursement for those expenses, although it depends on circumstances and if there was a prior agreement about reimbursement.
Lastly, beneficiaries cannot ask for reimbursement of the expenses they incur to take possession of estate property. For example, if a beneficiary must travel to another state and hire a moving company to pick up estate furniture, they cannot normally ask the estate to reimburse those costs unless the will specifically allows for such payment.
How to Ensure You are Reimbursed for Executor Expenses
As the executor of estate assets, you will incur certain expenses on behalf of the estate. You may need to pay some costs out of your own pocket and request reimbursement from the estate in probate court. Most states also allow reasonable compensation for your services as the estate executor, but that compensation is not meant to cover expenses that you paid on behalf of the estate.
As the executor, if you think the estate’s value is not large enough to pay all related expenses, you should consult with a probate attorney before spending any money. The probate court may prioritize which estate debts are paid first and your out-of-pocket expenses may not be reimbursed. Some estate expenses may not be paid at all.
To successfully request expense reimbursement from the estate, you need to maintain accurate records. Keep all receipts, invoices, and other proof of payments that relate to estate expenses. A thorough accounting of your expenses will increase the likelihood that you will be reimbursed by the probate court and help avoid questions from beneficiaries.
When You Have Executor of Estate Questions, Trust Our Estate and Probate Team
The probate process is an emotional time for everyone involved and estate executors bear a lot of responsibility. Before you pay estate expenses from your own resources, be sure you understand which costs may be reimbursed by the estate. The compassionate estate and probate attorneys at Barron, Rosenberg, Mayoras & Mayoras can help you fulfill your duties and receive appropriate compensation for your efforts.Schedule a consultation today by calling (248) 213-9514 in Michigan or (941) 222-2199 in Florida or using our simple online contact form. We help executors navigate the probate process and bring peace of mind during challenging times.