Executor claiming expenses from estate

Yes, an executor can claim legitimate expenses from the estate. This is a well-established principle in the law of England and Wales.

Legal basis:

An executor is entitled to be reimbursed from the estate for expenses properly incurred in the course of administering the estate. This right exists at common law and is reinforced by statute, principally section 31(1) of the Trustee Act 2000, which allows trustees (including executors) to reimburse themselves from the trust property for expenses properly incurred when acting on behalf of the trust.

What expenses can be claimed:

The key requirement is that the expense must be reasonable and properly incurred in the administration of the estate. Common examples include:

1. Probate application fees (currently £300 where the estate exceeds £5,000, with additional copies at £1.50 each).
2. Funeral costs, which are a first charge on the estate.
3. Valuation fees for property, shares, or other assets.
4. Legal fees, accountancy fees, and tax advice.
5. Travel costs reasonably incurred in dealing with estate administration, for example travelling to the deceased's property or to meet professionals.
6. Postage, phone calls, and other reasonable administrative costs.
7. Costs of maintaining or insuring estate property pending sale or distribution.
8. Estate agent fees and conveyancing costs if property is sold.
9. Inheritance tax and other liabilities paid on behalf of the estate.
10. Storage costs and costs of clearing the deceased's property.

What cannot be claimed:

An executor cannot claim for their own time unless the will specifically authorises charging, or unless they are a professional executor entitled to charge under section 28 or 29 of the Trustee Act 2000. A lay executor who spends many hours on administration is not entitled to charge for their time, only to recover out-of-pocket expenses.

An executor also cannot claim expenses that are unreasonable, excessive, or not genuinely connected to estate administration. For example, lavish travel or unnecessary professional fees could be challenged by beneficiaries.

Record keeping:

Executors should keep detailed records and receipts of all expenses claimed. They have a duty to produce estate accounts to the beneficiaries, and any expenses will be subject to scrutiny. If beneficiaries dispute the expenses, they can ask the court to pass the accounts, meaning the court examines and approves or disallows individual items. This is done under the Non-Contentious Probate Rules and the court's inherent jurisdiction.

Practical points:

It is sensible for executors to keep a running log of expenses with supporting receipts from the outset. If a particular expense is large or unusual, it is wise to obtain the agreement of the residuary beneficiaries in advance. This avoids disputes later and provides protection if the expenditure is questioned.

Where there are multiple executors, they should ideally agree expenses between themselves and keep a transparent record.

If an executor has paid estate expenses from their own funds, they are entitled to reimburse themselves from the estate before distributing to beneficiaries. Funeral expenses and administration costs rank ahead of legacies and the residuary estate in the order of priority for payment.

Disputes:

If beneficiaries believe an executor has claimed excessive or improper expenses, they can request full estate accounts, challenge specific items informally, or ultimately apply to the court under section 50 of the Administration of Justice Act 1985 or the court's inherent jurisdiction for the accounts to be examined. In serious cases of mismanagement, beneficiaries can apply to remove the executor.

If you have a specific situation in mind, such as a dispute over particular expenses, the amount involved, or the relationship between the executor and the beneficiaries, I can give you more targeted guidance.