Can an Executor of an Estate Spend Any Money From the Estate?

By Beverly Bird

Executors are allowed to spend estate money as they guide the estate through probate – they just can't spend it on themselves. Probate can be an expensive process, and your executor does not have to pay the costs herself. But if she does occasionally use her own money on behalf of the estate, she's entitled to reimbursement. But it's best to check with an attorney first to make sure she's taking money in the proper way.

Allowable Expenditures

Your executor is permitted to make expenditures from estate money to cover payment of debts you leave behind, taxes that are due, and the costs of operating your estate. This includes anything from a few dollars spent on postage to hiring an appraiser to value your assets. Your executor can pay your funeral expenses, and she'll probably have to keep current with insurance premiums for policies that cover your major assets. In most states, she must give an accounting to the court of all expenditures at the time she closes the estate.

Executor's Compensation

Probate can be a time-consuming and somewhat difficult job, so executors are typically entitled to compensation for their services. Many states' laws detail exactly how much an executor is entitled to receive. For example, in New Jersey, she gets a commission based on the value of your estate. Executors are typically paid when the estate closes, and the transaction must be approved by the court. Your executor can't arbitrarily take compensation from the estate whenever she likes.

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Time Limits on Estate Executor Duties in California

Probating a will is often an exacting job, and an executor must also be able to perform well under pressure. Deadlines for achieving tasks loom through the entire process. With small estates, this is usually no problem, but with large, complicated estates, an executor might find herself scrambling at the last minute to finalize certain duties. California's probate time limits are similar to those in other states.

How to Get a Surety Bond for Probate Court

In addition to taking on a detailed, complicated job, the executor of a probate estate sometimes runs into the added difficulty of having to secure a surety bond before she can even get started. When you nominate someone as executor in your will, you might want to think about what you're asking of her if you don't waive this requirement in the document. In most cases, the issuer of the bond will scrutinize her personal life. Depending on where you live, she might have to pay for the bond herself unless you make other arrangements.

Can the IRS Come Back for Taxes After the Estate Is Closed?

Most people do not owe estate taxes when they die, so they should not be a critical part of your estate planning unless you believe the total value of your estate will exceed the federal estate-tax exclusion amount -- $5.25 million, as of 2013. If the value of your assets is more than this, the burden of filing and paying estate taxes falls to the executor of your will during the probate process. If she doesn't do her job properly, the IRS can look to her for payment after your estate is closed.

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