When you become the executor of an estate, you take on an unpaid and time-consuming role with considerable responsibilities attached.
The law in England and Wales recognises that you are likely to incur costs while you are carrying out your duties as an executor and that you are entitled to claim reasonable expenses against the estate.
This does not mean that you can charge for your time (although professional executors do) – in reality most of us take on the role for a loved one and would not want to. On the other-hand it would seem unfair for a lay executor to absorb costs that result from this voluntary role, particularly when you are already vulnerable to claims and can be held personally liable for mistakes made in managing the estate.
In 2018 a case came to court where the beneficiaries disputed legal advice costs that executors had charged to the estate. The judge ruled in Mussell v Patience, that the executor was entitled to charge these expenses to the estate, provided they could demonstrate that the sum had been spent and it was done so in the fair execution of the estate administration.
This case demonstrated that there are no specific restrictions about what can and can’t be claimed for by an executor. As long as the expense can be justified as a legitimate cost related to their role and receipts are recorded and kept as part of the estate accounts, an executor’s costs can be reimbursed from the estate.
This means that lay executors can seek professional advice as part of their role and do not have to pay for it themselves. In addition an executor can be reassured that if they take out indemnity insurance, such as Executors Insurance, to protect themselves against potential claims, premium costs can be reclaimed from the estate.