Can I Use Estate Funds to Reimburse Myself as Executor?
April 16th, 2020 in Estate Planning and Trusts
Reimburse Myself As Executor
Reimburse Myself As Executor? Of course! But the answer goes a little deeper than this. We have to identify exactly what you’re seeking reimbursement for if and what you have to support your claim. The reason we categorize reimbursements is that each is prioritized differently, per statute.
How to Categorize Reimbursements
The starting point would be determining how much is actually passing through the court a/k/a probate. Based on the value of the probated estate, is it worth pursuing a reimbursement?
The second is to determine which category each of your claims (for a reimbursement) falls under, and how the statute governs how each should be handled. The process of categorizing your claims will help you to determine which claim holds a priority over the other.
Going by NCGS 28A-19-6(a), your claims will be paid in the order under which it falls.
Administrative Fees/Expenses
Administrative fees and/or expenses are incurred while serving and acting in your capacity as Administrator/Executor of the Estate. Any fees and expenses that fall under administrative are considered a priority to all other claims – with the exception of a yearly allowance if one is filed. Administrative fees and/or expenses generally include legal fees, CPA fees, court filing fees and costs, and postage costs to send items. Through a Petition for Reimbursement and/or proper supporting documents to show that personal funds were used, the court will review the expenses and issue an Order for Reimbursement of expenses that were considered and approved.
Funeral Expenses
For funeral expenses, any reimbursements sought will have to depend heavily on how much remains in the estate after administrative fees have been paid or reimbursed to the Administrator/Executor. If there are insufficient funds to satisfy the full amount of the funeral expenses paid for using personal funds, then it’ll be subject to part two of the above statute, which ultimately leaves it in the court’s discretion. Regardless, this bill has to be paid. If the estate can’t satisfy it in full, then the party who obtained the contract would be responsible for paying it off using personal funds. You can’t close the estate without a paid-in-full funeral receipt.
Creditors
If you’ve paid any creditors of the decedent and just now realized you weren’t responsible for it, you’ll want to be sure you’re keeping track of the invoice(s) and the payment(s) issued to them. These documents will come to serve you well in a paper-pushing process.
Are you having trouble organizing what you have in front of you to seek reimbursement? Or perhaps you want to know what you can do to prevent your liabilities from falling on someone else after you’re gone. It’s never too late to consult with an attorney on what you need to do to better plan for these expenses. With the right network and team on your side, you’ll be equipped to address the toughest questions for your appointed Agents.
We encourage you to review your plans with one of our attorneys and come see how our network of professionals can help you to execute your estate plan.
