Executor Seeks Reimbursement for Estate
An estate executor asks if they can be reimbursed from the estate for paying property taxes and upkeep costs, rather than funding them alone.
An executor appointed after their older brother's death is personally funding property expenses for an unprobated estate. The individual is financially exhausted from paying costs like taxes, insurance, and maintenance while other beneficiaries contribute nothing, according to a letter published in MarketWatch's The Moneyist column.
According to the query, the parents are deceased and the original executor, an older brother, died without probating the will. The writer, now the appointed executor, has siblings including a twin and several nieces and nephews from deceased siblings. The twin brother claims a lifetime right to live in one house, which requires repairs. The estate has undergone probate except for distributing the properties.
Executor's Financial Burden and Legal Options
The executor asks if they must continue paying expenses from their own pocket. They also want to know if paid costs can be reimbursed from the estate or charged against the beneficiaries' shares. Furthermore, they inquire about handling maintenance for the property occupied by their twin brother.
Quentin Fottrell, The Moneyist, responded to the letter. He stated that if the estate lacked sufficient cash during probate, the executor could petition the court to sell a property before distribution. This action would prevent further debt, penalties, or liens. Fottrell emphasized that being the executor does not obligate one to shoulder the burden of taxes and maintenance costs alone.
Reimbursement Process and Fiduciary Duties
Fottrell advised that until properties are officially distributed, expenses like maintenance and property taxes should be reimbursed by the estate. The executor must keep receipts and document everything. Executors are fiduciaries legally responsible for correct administration. Failure to do so could result in lawsuits from other beneficiaries.
During probate, the executor paid necessary expenses to avoid tax liens or foreclosure. Those funds could have been taken from the estate itself. Once distribution occurs, the responsibility shifts. However, if a beneficiary like the twin brother is already occupying a property, they should be liable for routine costs such as utilities, repairs, and upkeep. Property taxes are generally the property owner's responsibility.
Fottrell noted that probate typically takes four to 12 months. Executors are entitled to just and reasonable compensation, usually 1% to 3% of the estate, depending on state law and the will's instructions. This case has taken longer due to the original executor's death. The columnist acknowledged that serving as executor is a time-consuming and thankless job.
Final Steps and Partition Actions
If costs are not paid by beneficiaries after they take ownership, the executor can file a partition action to sell the property. The writer expressed frustration, stating, "It's not fair." They feel everyone expects their share of the estate despite not contributing financially.
The Moneyist regrets he cannot reply to questions individually. Financial and ethical questions can be emailed to qfottrell@marketwatch.com.
