What Can An Executor be Reimbursed for from an Estate Account? When serving as an executor or administrator of an estate, managing the estate’s financial affairs is a critical responsibility. One key aspect of this role is determining which expenses can be reimbursed from the estate account. Here’s a breakdown of allowable reimbursements:
1. An Executor or Administration can be Reimburse from an Estate Account for Funeral and Burial Expenses
Executors can be reimbursed from an estate account for the reasonable funeral and burial costs, including:
- Funeral home services
- Cemetery and burial plot expenses
- Cremation costs
- Memorial services
- Travel expenses for necessary arrangements
2. Probate and Court Fees
Legal fees, filing fees, and court costs directly related to the administration of the estate can be reimbursed from an estate account.
3. Attorney and Accounting Fees
Legal and accounting services necessary for probate proceedings, tax filings, and estate administration can be reimbursed.
4. Debts and Liabilities of the Decedent
Executors must settle outstanding debts, such as:
- Medical bills
- Credit card balances
- Loans and mortgages
In the unlikely event that the fiduciary paid these costs from their own pocket, then they can be reimbursed from an estate account.
5. An Executor or Administration can be Reimbursed from an Estate Account for Taxes
Reimbursable tax payments include:
- Federal and state income taxes
- Estate taxes
- Property taxes due before the estate is settled
6. Property Maintenance Costs
If the estate includes real estate, the executor may reimburse expenses for:
- Mortgage payments
- Utilities
- Property insurance
- Necessary repairs and upkeep
7. An Executor or Administration can be Reimbursed from an Estate Account for Reasonable Travel and Administrative Costs
Executors who incur travel or other expenses while fulfilling their duties may be reimbursed from an estate account for:
- Mileage or transportation costs
- Postage and mailing fees
- Notary fees
- Costs of obtaining copies of necessary documents
- Reasonable travel expenses incurred by the fiduciary in the course of estate administration
PRACTICE TIP: travel and administrative expenses are typically questioned and contested. The amount that the fiduciary can be reimbursed varies depending on the amount of work done, the necessity of the work performed, the distance traveled, and reasonableness of the expense relative to the size of the estate.
8. Business Expenses
If the estate owns a business, reasonable costs for maintaining operations until transfer or closure can be reimbursed.
9. Executor Compensation
State laws typically allow executors to receive compensation for their services, either as a percentage of the estate value or a reasonable hourly rate.
10. Limitations on Executor’s Authority
Executors cannot hire an agent or general manager to perform their duties. The responsibilities of estate administration are personal to the executor and cannot be delegated to another party. The executor must oversee all tasks related to the estate personally and ensure compliance with the law.
Final Considerations on being Reimbursed from an Estate Account
All reimbursements must be properly documented and recorded in estate accountings. Executors should maintain receipts and seek court approval when required. Misuse of estate funds can lead to legal consequences, so it’s crucial to follow the law and act in the estate’s best interest.
If you are an executor or administrator handling estate finances, consulting with an attorney can ensure compliance with estate laws and avoid disputes with beneficiaries.
For more information, please contact NYC Probate Litigation, Guardianship, Probate, and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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