What Executors Can Charge to the Estate

The executor had spent more than expected before probate was even granted.

There were court documents, replacement locks, insurance premiums, postage, property inspections and several trips to the deceased’s home. The executor had paid many of the bills personally because the estate account was not yet operating.

Then came a harder question.

Could the executor charge for the hours spent sorting paperwork, meeting advisers and dealing with demanding beneficiaries? What about meals purchased during long days at the property? Could the estate pay for accommodation, petrol or time taken away from work?

Executors should not be left personally out of pocket for reasonable costs properly incurred while administering an estate. However, reimbursement is not the same as payment for effort. An executor cannot simply calculate how many hours the role consumed, choose an hourly rate and withdraw that amount from estate funds.

The safest way to understand executor costs is to separate them into three categories:

1. Estate expenses paid directly from estate money
2. Personal expenses properly reimbursed to the executor
3. Remuneration for the executor’s time, skill or responsibility

Each category has different requirements.

## Why Executor Costs Matter

An executor is responsible for gathering the deceased’s property, paying valid liabilities, protecting assets and distributing the remaining estate according to the will.

That work naturally creates expenses.

The estate may need to pay for:

– Probate
– Legal advice
– Accounting
– Property security
– Insurance
– Valuations
– Maintenance
– Tax work
– Asset sales
– Storage
– Beneficiary payments

New Zealand law treats estate property as available for the payment of proper duties, fees, administration expenses and other liabilities before the beneficiaries receive what remains. citeturn694768search0turn694768search12

The executor should therefore distinguish legitimate administration costs from personal spending that merely occurred while the estate was being handled.

A cost is not automatically payable because the executor found the role inconvenient.

## The Three Main Types of Executor Cost

### Direct estate expenses

These are invoices addressed to the estate or incurred directly for administration.

Examples include:

– The probate filing fee
– A property valuation
– Estate legal work
– Insurance for the deceased’s home
– Accounting fees
– Storage charges

The estate pays the provider directly.

### Reimbursable executor expenses

These are proper estate costs initially paid by the executor from personal money.

Examples might include:

– Paying a locksmith before the estate account opens
– Buying tracked postage for court documents
– Paying for a death certificate
– Covering an urgent insurance premium
– Travelling to secure estate property

The estate later reimburses the executor for the exact supported amount.

### Executor remuneration

This is payment for the executor’s time, labour, expertise or responsibility.

Remuneration is different from expense reimbursement. It requires a proper legal basis and should never be taken merely because the executor believes the work deserves compensation.

## The Probate Filing Fee

The High Court currently charges **$275** to apply for probate or letters of administration. The fee may sometimes be waived, postponed or refunded where the applicable criteria are met. citeturn694768search2turn694768search22

This fee is a normal estate-administration expense.

If the executor pays it personally, retain:

– The filing receipt
– Proof of payment
– The court reference
– The reimbursement transaction

Do not describe it vaguely as “legal costs.” A clear entry such as “High Court probate filing fee” makes the estate accounts easier to understand.

Additional court fees may arise where the estate requires more than a routine probate application, such as disputed proceedings, court directions or another application.

## Death Certificates and Certified Documents

Executors may need multiple copies of the death certificate and certified copies of:

– The will
– Probate
– Identification
– Property documents
– Court affidavits

Reasonable document fees are normally legitimate administration costs where the documents are required to collect assets or complete the estate.

Keep a record of:

– What was ordered
– How many copies were obtained
– Which institutions required them
– The amount paid

Ordering excessive copies without any likely use may be difficult to justify, particularly in a small estate.

## Legal Fees

Legal work can be one of the estate’s largest administration expenses.

The estate may reasonably require legal assistance for:

– Preparing probate documents
– Responding to a court requisition
– Interpreting the will
– Transferring or selling land
– Advising on creditor claims
– Managing beneficiary disputes
– Addressing relationship property
– Handling overseas assets
– Obtaining court directions
– Preparing settlement documents

Legal costs properly connected with the executor’s representative duties may generally be paid from estate property.

However, not every legal bill incurred by an executor belongs to the estate.

Suppose the executor is also a beneficiary and obtains advice about how to preserve their personal inheritance against another claimant. That advice may serve the executor individually rather than the estate.

The invoices should distinguish:

– Advice to the executor in their representative capacity
– Advice to the executor personally
– Work performed for a beneficiary
– Work performed for another related entity

Personal legal expenses should not be hidden within general estate-administration charges.

## Accounting and Tax Costs

The estate may need accounting assistance to:

– Complete the deceased’s outstanding returns
– Prepare the final personal return
– Register the estate for tax
– Prepare estate income tax returns
– Calculate rental or business income
– Account for foreign income
– Prepare final estate statements
– Resolve complex asset values

New Zealand estates are taxed on income they generate, and the executor or administrator is responsible for dealing with the deceased’s bills and estate financial obligations. citeturn694768search5turn694768search7

Reasonable accounting fees required to complete those duties are normally estate expenses.

Do not confuse tax deductibility with reimbursement.

An expense may be properly payable by the estate even if it is not deductible when calculating taxable income. Tax deductibility is a separate question that depends on the nature of the expense and the income-producing activity.

## Property Security Costs

The executor must take reasonable steps to protect estate property.

Typical security expenses can include:

– Locksmith services
– Replacement keys
– Alarm monitoring
– Boarding a damaged window
– Security lighting
– Gate repairs
– Temporary fencing
– Secure storage for valuables
– Regular property inspections

These costs are often incurred immediately, before probate or an estate account is available.

They are more likely to be reimbursable where they were:

– Necessary
– Reasonable in price
– Connected directly with estate protection
– Supported by an invoice
– Not primarily for the executor’s personal benefit

Replacing locks because unknown people hold keys may be prudent. Installing an expensive security system far beyond the property’s needs may require a clearer justification.

## Insurance Premiums

The deceased’s house, vehicles, business assets and other valuable property may need continuing insurance.

The executor should notify the insurer of the death and any change in occupancy.

Reasonable estate costs can include:

– Home insurance
– Vacancy-related premiums
– Vehicle insurance
– Business insurance
– Contents cover
– Additional inspection requirements

Insurance costs should remain proportionate to the risk and value of the asset.

If the executor uses an estate vehicle personally, any added insurance cost associated with that personal use may not properly belong to the estate.

## Rates, Utilities and Property Holding Costs

A property may generate ongoing expenses while probate, sale or transfer is completed.

Common costs include:

– Council rates
– Electricity
– Water
– Gas
– Internet or alarm connections
– Body-corporate charges
– Lawn care
– Essential cleaning
– Pest control
– Necessary heating or ventilation

The executor should review each service rather than continuing every contract automatically.

Some services may be needed to preserve the home. Others may be unnecessary subscriptions that should be cancelled.

Keep records explaining why a service remained active.

For example, electricity may need to remain connected for security, heating, alarms, ventilation or property inspections. A premium entertainment subscription is unlikely to be a proper estate cost after the house is empty.

## Repairs and Maintenance

The executor may need to repair estate property to prevent damage or prepare it for sale.

Reasonable expenses might include:

– Fixing a leaking roof
– Repairing broken plumbing
– Replacing unsafe locks
– Removing hazardous waste
– Repairing storm damage
– Servicing essential equipment
– Addressing issues required by an insurer
– Making modest sale-preparation repairs

The executor should distinguish between preservation and improvement.

Replacing a broken exterior door may preserve value. Undertaking a major luxury renovation based on the executor’s personal taste is much harder to justify.

Before approving substantial work:

– Obtain quotations
– Consider the likely effect on value
– Consult co-executors
– Record the reason
– Consider whether sale without the work is more appropriate
– Retain invoices and photographs

## Cleaning, House Clearance and Disposal

The estate may need to pay for:

– General cleaning
– Rubbish removal
– House clearing
– Transport
– Recycling
– Disposal of unsafe goods
– Specialist document destruction

These costs can be proper where they are needed to secure, empty or sell estate property.

The executor should first ensure that:

– Specific gifts have been identified
– Valuable items have been removed
– An inventory has been prepared
– Beneficiaries have had any appropriate selection opportunity
– Important documents have been preserved

An executor should not pay a family member an arbitrary cash amount for “cleaning everything out” without records of the work, time or disposal costs.

## Valuation Expenses

Valuations may be needed for:

– Houses
– Farms
– Businesses
– Vehicles
– Jewellery
– Art
– Collectibles
– Company shares
– Overseas assets

A reliable valuation helps the executor:

– Prepare estate accounts
– Assess solvency
– Sell at a defensible price
– Divide assets fairly
– Manage conflicts
– Complete tax work
– Calculate beneficiary entitlements

The estate does not need expensive formal valuations for every ordinary household item. The level of valuation should reflect the asset’s value, complexity and dispute risk.

A professional valuation is especially important when the executor or a relative wants to buy the asset.

## Sale Costs

When estate assets are sold, the estate may pay reasonable costs connected with the transaction.

These may include:

– Property sale commission
– Advertising
– Auction or listing fees
– Legal conveyancing
– Valuation
– Cleaning and presentation
– Transport
– Storage
– Vehicle compliance work
– Auctioneer fees
– Settlement adjustments

These costs should be shown separately from the sale proceeds in the final estate accounts.

For example, if a house sells for $800,000 but the estate receives $762,000 after the mortgage and sale expenses, beneficiaries should see the deductions rather than being shown only the gross sale price.

## Storage Costs

Storage may be necessary where:

– A house must be cleared before sale
– Valuable items are disputed
– A beneficiary cannot collect a specific gift
– Business records must be preserved
– Furniture is awaiting distribution
– The estate is involved in litigation

Storage should not continue indefinitely without review.

Record:

– What is stored
– Why storage is necessary
– The monthly cost
– Who has access
– Insurance
– The expected end date
– Whether sale or disposal would be more economical

The executor should not charge the estate for storing their personal property alongside estate items unless the expense has been divided fairly.

## Postage, Courier and Communication Costs

Reasonable communication expenses may include:

– Tracked postage
– International courier fees
– Secure delivery of original documents
– Printing
– Certified copies
– Necessary telephone charges

Ordinary personal phone plans and internet subscriptions should not usually be transferred wholesale to the estate because the executor made some estate-related calls.

Where estate communication costs are modest, claiming every incidental cent may create more accounting work than value. Larger or unusual costs should be documented carefully.

## Travel Costs

Travel can be one of the most disputed executor expenses.

Reimbursement may be reasonable where travel is necessary to:

– Secure the deceased’s property
– Attend a court or professional appointment
– Inspect an estate asset
– Manage a business
– Deliver valuable documents
– Attend settlement or mediation
– Complete a task that cannot reasonably be handled remotely

Potential costs include:

– Mileage
– Public transport
– Airfares
– Parking
– Tolls
– Necessary accommodation

The key questions are:

– Was the travel genuinely required?
– Was the cost reasonable?
– Was the executor acting for the estate?
– Could the task have been completed more economically?
– Was the trip combined with a personal holiday?
– Is there evidence of the journey and purpose?

An executor who visits the deceased’s home five kilometres away may reasonably record mileage or fuel associated with necessary visits. An executor flying across the country in a premium seat without considering alternatives may face questions.

## Accommodation

Accommodation may be reimbursable where an executor must travel and an overnight stay is reasonably necessary.

Examples could include:

– Securing a remote property
– Attending a multi-day mediation
– Managing an urgent business matter
– Preparing a house for sale where no local assistance is available

The estate should not pay for:

– Luxury accommodation unrelated to need
– Extra nights added for recreation
– Accommodation for family members who were not required
– Personal holiday extensions

Where a journey combines estate and personal purposes, divide the costs fairly and document the calculation.

## Meals

Meals are more difficult.

An executor must eat regardless of whether estate work is being performed. Ordinary daily meals are usually personal living costs rather than estate expenses.

A meal might be more defensible where it forms part of necessary overnight travel or a formal estate meeting, but the amount should remain reasonable.

The estate should not fund:

– Family dinners
– Alcohol
– Celebration meals
– Regular takeaway food during house clearing
– Personal groceries
– Entertainment

Executor inconvenience does not turn normal personal consumption into an estate cost.

## Lost Wages and Time Away From Work

An executor may take unpaid leave or lose business income while administering the estate.

That financial sacrifice does not automatically become a reimbursable expense.

Lost wages represent compensation for time rather than repayment of money spent directly for the estate. They therefore resemble remuneration.

The executor should not submit a personal invoice for:

– Annual leave used
– Unpaid leave
– Missed overtime
– Lost business opportunities
– General inconvenience
– Time spent answering emails

Payment may be possible only where there is a proper legal basis, such as a valid remuneration clause, informed agreement or court approval.

## Can Executors Be Paid for Their Time?

An executor may be entitled to remuneration where the will provides for payment or another recognised basis applies.

Community legal guidance states that executors can be paid for their services where the will provides for it. Professional executors will commonly expect an appropriate charging arrangement to be included. citeturn694768search10turn694768search25

The charging clause should be read carefully.

It may allow:

– A fixed amount
– Professional fees
– Reasonable remuneration
– Payment according to a particular scale
– Commission
– Fees for work performed through the executor’s professional practice

A clause allowing a professional executor to charge for professional services does not necessarily allow every family executor to choose an hourly rate.

Where the wording is unclear, obtain advice before making payment.

## Reimbursement Is Not Remuneration

The difference can be illustrated simply.

### Reimbursement

The executor pays a $380 locksmith invoice personally. The estate later repays exactly $380 after receiving the invoice and proof of payment.

### Remuneration

The executor spends six hours arranging the locksmith, attending the property and updating beneficiaries. The executor charges the estate $600 for that time.

The first payment replaces an expense actually paid for the estate.

The second compensates the executor for labour. It needs separate authority.

Mixing the two categories is a common accounting error.

## Professional Executors

A lawyer, accountant or other professional may act as executor and perform professional services for the estate.

The estate may then incur:

– Executor remuneration
– Professional fees
– Staff charges
– Disbursements
– External adviser fees

The accounts should identify these clearly.

A professional executor should not charge twice for the same work by treating it as both executor remuneration and professional time without an appropriate basis.

Beneficiaries should be able to understand:

– What service was performed
– Who performed it
– The rate or charging basis
– Whether tax was included
– Whether the will authorises the charge
– Whether external costs were added

## Can a Family Executor Hire Their Own Business?

Suppose the executor owns a cleaning, maintenance, accounting or transport business.

Hiring that business creates a conflict of interest.

It may be permissible where:

– The service is genuinely required
– The price is reasonable
– The relationship is disclosed
– Comparable quotes are considered
– Co-executors approve appropriately
– The work is documented
– The estate benefits

The executor should not award work to themselves secretly or inflate the price.

A related-party invoice should receive at least the same scrutiny as an invoice from an unrelated provider.

## What Cannot Usually Be Reimbursed?

Costs that are commonly personal or difficult to justify include:

– Ordinary meals
– Everyday clothing
– Personal phone and internet plans
– Family travel to attend the funeral
– Time off work
– Emotional stress
– Childcare for personal convenience
– Personal legal advice
– Fines or penalties caused by the executor
– Luxury upgrades
– Gifts to helpers
– Unsupported cash payments
– Costs benefiting the executor rather than the estate

There may be unusual cases where a cost has a legitimate estate connection. The executor should still ask whether an independent executor would reasonably approve it.

## Funeral Attendance Costs

Family members may expect the estate to pay for:

– Airfares
– Accommodation
– Meals
– Clothing
– Vehicle hire
– Lost wages

Attending a funeral is generally a personal or family expense unless the will, an agreement or unusual circumstances provide another basis.

The executor should not reimburse relatives merely because the estate can afford it.

Funeral service expenses are different from the personal costs individuals incur to attend the service.

## Penalties Caused by the Executor

An executor should not charge the estate for losses caused by their own avoidable default.

Examples include:

– Late-payment penalties resulting from ignored invoices
– Parking fines
– Traffic infringements
– Additional interest caused by unexplained delay
– Cancellation fees for appointments the executor missed
– Rebooking costs caused by poor planning

Where the executor acted reasonably and a penalty was unavoidable, the position may require closer analysis. However, the estate should not automatically carry the cost of the executor’s personal carelessness.

## Keep Evidence for Every Reimbursement

A proper reimbursement claim should contain:

– Date
– Supplier
– Description
– Estate purpose
– Amount
– Receipt or invoice
– Proof of personal payment
– Co-executor approval where appropriate
– Reimbursement date
– Estate bank reference

Use a schedule such as:

| Date | Expense | Purpose | Amount | Evidence |
|—|—|—|—:|—|
| 4 August | Locksmith | Secure estate home | $380 | Invoice and bank receipt |
| 7 August | Tracked courier | Probate documents | $46 | Courier receipt |
| 12 August | Insurance premium | Maintain home cover | $1,140 | Policy and payment record |

Do not submit a pile of receipts without explaining how each cost relates to the estate.

## Set an Approval Process for Multiple Executors

Where several executors act, agree on cost controls early.

The agreement might require:

– One executor can approve expenses below $250
– Two approvals are needed for larger costs
– Multiple quotations are required above $2,000
– Related-party transactions require full disclosure
– Every executor receives monthly expense reports
– No executor remuneration is paid without written authority

The figures should suit the estate’s size and complexity.

The purpose is not to make urgent work impossible. It is to prevent one executor from spending estate money without oversight.

## Budget for Administration

Create an estate budget covering expected costs such as:

– Probate fee
– Legal work
– Accounting and tax
– Property insurance
– Rates
– Maintenance
– Valuation
– Sale expenses
– Storage
– Travel
– Foreign administration
– Contingency

A budget helps the executor decide how much cash must remain available.

It also helps explain to beneficiaries why the gross estate value is not the amount they will inherit.

## Review Costs for Reasonableness

Before approving an expense, ask:

### Was it necessary?

Did it help collect, preserve, manage or distribute the estate?

### Was the price reasonable?

Were quotes obtained where appropriate?

### Did the estate benefit?

Was the cost primarily for the executor or a relative?

### Is there authority?

Does the will, law or administration role support it?

### Is it documented?

Can the payment be proved and explained later?

### Is there a conflict?

Is the executor, a relative or an associated business receiving the money?

A cost should pass all six tests before it appears in the estate accounts.

## Show Costs Clearly in the Final Accounts

The final estate accounts should separate costs into meaningful categories.

For example:

| Administration Expense | Amount |
|—|—:|
| Probate filing fee | $275 |
| Legal fees | $6,800 |
| Accounting and tax | $2,400 |
| Property insurance | $1,750 |
| Rates and utilities | $3,120 |
| Valuation | $950 |
| Repairs and maintenance | $4,600 |
| Sale costs | $22,300 |
| Executor reimbursements | $1,145 |

Do not combine everything into “miscellaneous administration costs.”

Beneficiaries should be able to see what reduced the estate and why.

## A Practical Executor Expense Policy

A reliable cost policy can be built around eight rules:

1. Use estate funds only for proper estate purposes.
2. Keep estate and personal money separate.
3. Obtain receipts and invoices.
4. Reimburse exact costs rather than estimates.
5. Separate reimbursement from remuneration.
6. Disclose conflicts and related-party services.
7. Obtain approval for significant expenditure.
8. Include every payment transparently in the final accounts.

Executor costs are not improper merely because they reduce the inheritance. Estates cost money to administer.

The real question is whether each cost was necessary, reasonable, authorised and supported. When the answer is yes, reimbursement protects the executor from unfair personal expense. When the answer is no, estate money should remain where it belongs.

## Frequently Asked Questions

### 1. Can an executor be reimbursed for expenses in New Zealand?

Yes. An executor can generally be reimbursed for reasonable expenses properly incurred while administering and protecting the estate, provided the costs are documented and connected with estate duties.

### 2. Can an executor charge an hourly rate?

Not automatically. Payment for time is remuneration rather than reimbursement. It requires a proper basis, such as a charging clause in the will, informed agreement or court authority.

### 3. Can the estate reimburse executor travel?

Necessary and reasonable travel may be reimbursable where it is directly connected with estate administration. Personal travel, holiday extensions and excessive costs should not be charged to the estate.

### 4. Can meals be claimed as executor expenses?

Ordinary meals are generally personal expenses. Reasonable meal costs may sometimes form part of necessary overnight estate travel, but they should be modest and properly documented.

### 5. Can an executor recover lost wages?

Lost wages or business income are not ordinarily direct expense reimbursements. They amount to compensation for time and generally require authority for executor remuneration.

### 6. Can the executor hire their own company?

Potentially, but the conflict must be disclosed and managed. The service must be necessary, reasonably priced and properly documented, with independent quotations or co-executor approval where appropriate.

### 7. Who pays the probate filing fee?

The probate filing fee is normally an estate-administration expense. If the executor pays it personally, the estate may reimburse the executor when funds become available.

### 8. What proof should an executor keep for expenses?

Keep invoices, receipts, proof of personal payment, an explanation of the estate purpose, approvals and the estate-bank transaction showing reimbursement.