An executor has an obligation to preserve an estate's assets to the best of his ability for the benefit of those who will receive it. Sometimes probate is pending and a decedent's house is falling into disrepair or damaged to such an extent that its value would greatly disintegrate without immediate attention. In such cases, an executor may not only have the right, but a duty to use cash assets of the estate to pay for repairs.
Mortgage Lender's Option
If there is a mortgage on the decedent's house, it may give the lender the option to pay expenses to prevent the house from going into disrepair and charge those payments back to the borrower. If the executor neglects to have the work done, the lender may opt to do so and charge repair expenses back to the estate or deem the failure to make repairs a violation of the terms of the mortgage.
Often a will grants an executor the power to preserve or manage assets in a way that results in the most value to beneficiaries. Even if those powers are not specifically given by the will, state law may provide them. The executor, however, cannot exceed that authority by using the estate's money to substantially improve a decedent's house under the guise of preserving it. However, if the will directs the house to be sold and grants the executor the authority to make investments, he may have the right to authorize improvements that substantially increase the resale value. If the executor is in doubt regarding his actions, he may ask the probate court for approval.
Sometimes a will gives a house to one individual and cash to other beneficiaries. In that case, the executor may be acting outside the scope of his duties by using the cash inheritance from some beneficiaries to increase the value of another beneficiary's inheritance. Real estate generally passes to a beneficiary upon probate, subject only to the executor’s authority to use assets to pay claims or debts against the estate. If no part of the house's value is needed to pay estate debts, the executor may be unable to justify repairs to the beneficiaries. In this instance, it would be wise for an executor to obtain signed consent from all beneficiaries, or a court order, before proceeding with repairs.
An executor has an obligation to act impartially, honestly and in good faith when representing beneficiaries. Most states require that an executor give the court an accounting and inventory reflecting his management of the finances and assets of an estate. The beneficiaries are entitled to copies of those documents. If, for example, an accounting were to show that an executor made excessive and unnecessary improvements to a house that he inherited under the will and used the estate's funds to pay for the improvements, the remaining beneficiaries could petition the court for his removal as executor. The executor may also be held liable for breach of his duties should the beneficiaries choose to pursue a court action.