Can Executors Claim Expenses Against an Estate?
When you become the executor of an estate, you take on an unpaid and time-consuming role with considerable responsibilities attached.
The good news is that the law in England and Wales recognises that you are likely to incur costs whilst 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 the 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 that 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 cannot 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.
What this means is that lay executors can seek professional advice as part of their role and that they 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, the costs of the insurance premium can be reclaimed from the estate.
About the author
Guy has worked in the insurance profession for over thirty years, initially in the London Insurance market as a broker and subsequently as a Lloyd’s Members’ Agent. He set up private client insurance brokers Castleacre in 2005. Castleacre is the first company in the UK to offer indemnity insurance to lay executors – in direct response to clients who had become executors but could not find suitable cover on the market. If you have would like to know more about executor liability insurance or to contact Guy click here. If you wish to view the Executors Insurance blog click here.