Can Executors of an Estate Put a Lien on a House?

by Marie Murdock

When naming an executor in a last will and testament, the testator, or person making the will, designates someone he trusts to handle his affairs and carry out his last wishes. Executors have a fiduciary duty, or legal obligation, to attempt to fulfill the terms of a last will and testament as completely as possible without acting in a self-serving manner. Disagreements, however, often arise when an executor seeks compensation from the estate for services rendered or money advanced on behalf of the estate.

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Creation of Lien

A lien is an encumbrance or cloud upon an asset. If that asset is real estate or real property, then that lien, unless invalidated or otherwise removed, attaches to and follows the real estate even after it is sold. A judgment granted by the court against a living property owner, when filed in the real property records becomes a lien against his property. Another type of lien is a mechanic’s lien filed in the property records by a contractor for work performed for which he was not paid. In the case, however, of a deceased property owner, encumbrances against real property generally occur in the form of claims filed in probate court against the estate for money owed. An executor is responsible for seeing that debts or claims against the estate are paid before distributing estate property to the heirs.

Compensation for Duties

An executor may be entitled to compensation for his work or services in settlement of the estate. The testator may have stated how much the executor is to be paid in the will. If compensation is not mentioned in the will, the laws of most states provide for compensation to an executor upon approval by the probate court. If the liquid assets of the estate are so minimal that there is not enough money to pay the executor’s fees in cash, then the executor may choose to file his court-approved claim against the estate for compensation. When the property is sold, his claim should be paid along with the valid claims of other creditors before any estate proceeds are distributed to the heirs.

Materials and Services

An executor of an estate may be faced with the dilemma of attempting to preserve estate assets without sufficient liquid or cash funds inside the estate to do so. If the executor is also one of the heirs, he may choose to expend money from his own personal account for materials needed for home repair. He also may perform the work on the home himself, if qualified, and charge his labor costs back to the estate in the form of an estate claim if allowed by the court. He should avoid, however, creating a conflict of interest between his duties as an executor and his status as an estate creditor. Before incurring individual expenses on behalf of the estate, he should be aware that executor claims may require court approval before payment.

Breach of Fiduciary Duty

If an executor places an unreasonable, invalid or unauthorized claim against estate assets, then the heirs may dispute the claim before the court. If proven to the court that the executor is mishandling estate assets or attempting fraud, the court may order him removed and a successor executor appointed to act in his stead.