When acting as an executor of an estate, it is natural to have questions about what costs can be recovered during the administration process.
Executors often take on significant responsibilities. From organising the funeral arrangements, and managing property, and dealing with legal paperwork and financial institutions.
The law recognises that many of these duties involve out-of-pocket expenses, and in most cases, executors are entitled to be reimbursed from the estate for reasonable costs properly incurred in carrying out their role.
However, it is important to understand what qualifies as an allowable expense, as well as the distinction between expenses and any entitlement to payment for time spent acting as executor.
Introduction to Executor Expenses
As mentioned above, executors can only recover reasonable expenses, and they must not profit from their role as an executor.
They are not responsible for paying bills themselves so can be reimbursed if they happen to have paid for any.
The role of an executor in estate administration
Where somebody makes a Will, they must choose an executor or executors to administer the estate. A maximum of four executors can be appointed to act to administer an estate. The executors are entrusted to administer the estate; this means they are responsible for dealing with and distributing the estate in accordance with the terms of the Will.
Why understanding reimbursable expenses matters
Executors are under a duty to prepare estate accounts at the end of dealing with an estate and all expenses should be listed.
Executors therefore need to know what they can and cannot claim.
Can Executors Claim Expenses from an Estate?
Executors can only claim out of pocket expenses and reasonable expenses such as mileage.
Legal entitlement to reimbursement
As every estate is unique. There is no hard and fast rule setting what executors can and can’t claim. It is important that executors keep all receipts and a record of their expenses so that they can produce an itemised breakdown for the beneficiaries should any queries arise.
Difference between expenses and an executor’s fees
An executor's fee is a payment for time, labour and professional services required to administer the estate. Executor expenses are reimbursements for out of pocket expenses.
Generally an executor can only charge for their time spent if they are professional executors i.e. solicitors, unless the Wil provides otherwise.
Out of pocket expenses can be claimed by lay executors for any expenditure they have incurred on behalf of the estate.
When might an executor choose to waive expenses
An executor may waive claiming expenses if they wish to leave more funds to the beneficiaries but this is a decision for them to make.
What Expenses Can an Executor Claim?
These are examples of out-of-pocket expenses for which Executors can claim reimbursement:
- The cost of death certificates
- Professional fees, such as those of solicitors and surveyors
- Travel expenses i.e. mileage or train fares
- Probate Registry fees
- Property maintenance fees during probate i.e. gardening and cleaning
- House insurance premiums
- Valuation fees and other estate agent fees
- Postage costs
- Other fees associated with selling a property, such as clearance costs
Expenses Executors Cannot Claim
Unless the executors are professional executors, they cannot charge for their time administering an estate as they cannot profit from the role.
Large or complicated estates may require the executors to take some time off work or make other sacrifices so when making a Will, the testator should always check that the Executors they choose are happy to take on the role.
They cannot claim for excessive or unreasonable expenditure such as expenses disproportionate to the estate’s value or for costs unrelated to the estate administration.
The following are examples of this:
- Lavish funeral or extravagant wake costs which could easily be challenged.
- Unnecessary travel and accommodation charges i.e. 1st class flights, luxury hotels and disproportionate mileage for tasks that could be handled locally.
How Executors Should Record and Claim Expenses
Executors should always keep a record of their expenses.
It is essential to keep receipts and other records such as bank statements.
Tax Implications of Executor Expenses
Executor expenses are generally not treated as taxable income of the executor. This is because the role is generally unpaid (unless the executor is a professional), and paying out of pocket expenses is simply returning money spent on behalf of the estate.
Professional Executors vs Lay Executors
Many executors choose to appoint a firm of solicitors, like Timms, to act on their behalf and to relieve them of the burden.
The lay individuals named as executors would still be the executors, but Timms can act on their behalf to do all the running around and the legal work required to fully administer an estate.
How professional executors charge differently
A professional executor can charge for their time spent, and often will charge an hourly rate, or a percentage of the estate, or both.
Benefits of appointing a solicitor or trust company
Professional executors or trust companies appointed as executors can often take the burden away from a lay executor having to undertake the administration themselves. Particularly where there are family disputes, the estate is particularly large or complex, or where the executor simply does not wish to take on the role.
Summary: What Executors Need to Know About Claimable Expenses
Understanding what expenses an executor can claim is an important part of ensuring an estate is administered correctly and fairly. From travel and administration costs through to professional fees and property related expenses, executors are generally entitled to reimbursement for reasonable out-of-pocket costs incurred while carrying out their duties.
However, clear records and careful management are essential to avoid disputes and ensure transparency with beneficiaries.
If you are acting as an executor and are unsure what you can claim or you are dealing with a dispute over estate expenses, seeking specialist probate advice can help you move forward with confidence. Our experienced probate solicitors are here to guide you through every step of the process.
With offices in Derby, Ashby, Swadlincote and Burton on Trent we are here to help.
Please contact our team on freephone 0800 011 6666 or at legal@timms-law.com for clear, practical advice tailored to your circumstances.
Frequently Asked Questions
Can an executor claim for time spent administering the estate?
In most cases, lay executors are not entitled to claim payment for their time spent administering an estate. However, they can be reimbursed for reasonable out-of-pocket expenses.
If a professional executor, such as a solicitor or trust company, is appointed, they may charge fees for their services in accordance with their terms of engagement or the will.
Do executors have to pay expenses upfront?
Yes, executors often pay some expenses upfront, particularly in the early stages of estate administration before funds are readily accessible. These costs can then usually be reclaimed from the estate once assets are collected.
In some cases, funds may be released early by banks or through interim estate accounts to help cover essential expenses.
Can beneficiaries challenge executor expenses?
Yes, beneficiaries can challenge executor expenses if they believe costs are unreasonable, unnecessary or not properly incurred while administering the estate.
Executors are expected to keep clear records and receipts to demonstrate transparency and justify any reimbursements claimed from the estate.
What happens if expenses are disputed?
If executor expenses are disputed, the matter may initially be resolved through discussion between the executor and beneficiaries. If agreement cannot be reached, legal advice may be required, and in some cases the court may become involved to determine whether the expenses are appropriate and payable from the estate.
