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Can executors claim expenses?

If you are a personal representative (either an executor or an administrator) of an estate, then you are not entitled to charge for the time you spend dealing with the deceased’s affairs. The only exception is if you are a professional, such as a solicitor or an accountant, and you are acting in your professional capacity as an executor. This does not, however, mean that you should be out of pocket.

Personal representatives are entitled to be reimbursed for any reasonable, out of pocket expenses incurred during the estate administration. As long as the estate is solvent (there is a sufficient amount of assets to cover the liabilities) then the expenses will be treated as if they were a liability of the estate.

There is no strict definition of what a reasonable expense is but, generally speaking, this will include costs associated with:

  • Obtaining the Grant of Representation, such as the Probate Registry application fee.
  • Collecting in and preserving the deceased’s assets, such as paying for home insurance for an unoccupied property.
  • Administering the estate, such as paying professional fees for a legal advisor.
  • Inheritance Tax.
  • Travel expenses, as long as the travel was necessary to deal with the estate assets or progress the administration. This may be if you need to travel to the deceased’s property to meet with estate agents so that the property can be valued.

There can be grey areas as to what is and what is not acceptable. It is therefore important that you:

  • Consider whether the expense is necessary and reasonable. Perhaps think whether there may be a more cost-effective method of doing something, such as booking train tickets in advance rather than on the day of travel to minimise your travel expenses. If you need to repair something in the deceased’s property, obtain a few quotes to ensure that you are paying a competitive rate.
  • Keep all receipts, invoices and bank statements as evidence of the expenses that have been incurred.
  • For travel expenses, keep a log which details the date of the journey, how many miles you travelled, the reason for the journey and any petrol receipts, train or bus tickets. If you have travelled in your own car and are claiming petrol as an expense, your expenses will likely be calculated using HMRC’s approved mileage and fuel rates.
  • Record your expenses in the Estate Accounts.
  • Ask the residuary beneficiaries to approve the estate reimbursing the expenses so they are aware of any deductions. This is particularly important when there is no evidence or receipts have been mislaid.

Ultimately, you have a duty to act in the best interests of the estate and the beneficiaries and so any deductions from the estate must be justifiable.

If you have any questions about estate administration expenses please feel free to contact a member of our team today on 0113 207 0000.

 

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Emily Owston

Paralegal
Wills & Probate
EOwston@LawBlacks.com
0113 227 9263
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