Paying Estate Expenses While Probate Is Pending

The funeral invoice was due on Friday.

The deceased had enough money in a bank account to cover it several times over, but the account had been restricted after the bank learned of the death. The executor had applied for probate, yet the grant could still be weeks away.

Meanwhile, electricity bills were arriving at the deceased’s empty house. Insurance needed to remain in place. A leaking pipe required urgent attention, and one family member was insisting that the executor simply use the deceased’s bank card.

It is an uncomfortable situation: the estate has money, but the person responsible for protecting it may not yet be able to access it.

In New Zealand, probate is the High Court’s formal recognition of a will and the executor’s authority to administer the estate. An executor named in a will may take necessary protective steps before probate is granted, but banks, investment providers and other asset holders will commonly require formal evidence of authority before releasing substantial estate funds. citeturn731491search0turn731491search3

The period before probate is therefore not a financial free-for-all, nor is it a complete legal vacuum. The executor must distinguish between preserving the estate, arranging essential payments and attempting transactions that require the grant.

## Why Estate Money Can Become Temporarily Inaccessible

When a bank learns that a customer has died, it will usually restrict accounts held solely in that customer’s name.

This serves an important purpose. It helps prevent unauthorised withdrawals, identity misuse and payments that should no longer be made. It also protects the bank from releasing money to someone whose authority has not been established.

The account is not necessarily “frozen” in the sense that nothing can happen. The bank may still:

– Receive deposits
– Reverse certain payments
– Deal with an approved funeral invoice
– Provide limited information after identity checks
– Process the account under its deceased-estate procedures
– Release qualifying funds without probate in appropriate cases

The exact process varies between institutions. Executors should ask what the bank requires rather than assuming every account will be treated identically.

A joint account may continue to operate for the surviving account holder, subject to the account terms and any ownership dispute. A sole account is different because its balance generally forms part of the deceased’s estate.

## The Most Important Rule: Do Not Pretend to Be the Deceased

An executor should not use the deceased’s:

– Bank card
– Personal identification number
– Online banking password
– Mobile banking application
– Stored payment credentials
– Signed blank cheques

This remains risky even when the executor intends to pay a genuine estate expense.

The fact that the deceased once shared a password or allowed a family member to use an account does not create continuing authority after death. An enduring power of attorney also ends when the person who granted it dies. The former attorney does not automatically become entitled to manage the estate.

Using the deceased’s credentials can make legitimate payments look like unauthorised transactions. It may also interfere with the estate accounts, trigger fraud controls and expose the person making the withdrawal to difficult questions later.

The correct approach is to notify the bank and use its deceased-estate process.

## What an Executor Can Do Before Probate

An executor does not need to wait passively while property deteriorates and bills accumulate.

Before probate, the executor can commonly take sensible steps to protect and investigate the estate. These may include:

– Locating and safeguarding the original will
– Arranging the funeral
– Securing the deceased’s home
– Collecting keys
– Photographing valuable contents
– Notifying banks and insurers
– Redirecting mail where appropriate
– Obtaining account and asset information
– Requesting date-of-death balances
– Maintaining insurance
– Arranging emergency repairs
– Caring for pets or livestock
– Identifying creditors
– Preparing the probate application
– Keeping records of expenses paid personally

These actions preserve value rather than distribute or permanently dispose of it.

The executor should still act cautiously. Being named in the will does not guarantee that every third party will accept instructions before the grant. Probate provides the formal proof that institutions usually rely on when transferring control of estate assets.

## What Usually Must Wait for Probate

Without probate, an executor may be unable to complete major transactions involving assets held solely by the deceased.

Depending on the estate, the executor may need the grant before being able to:

– Close substantial bank accounts
– Withdraw or transfer investment funds
– Sell or transfer land held in the deceased’s sole name
– Redeem significant term deposits
– Transfer shares
– Receive certain insurance or retirement-savings proceeds
– Establish a fully operational estate account
– Sell assets where proof of authority is required
– Make distributions to beneficiaries

The dividing line is not simply whether the executor believes a payment is sensible. The holder of the asset must be legally and procedurally satisfied that it is dealing with the correct person.

Executors should avoid signing unconditional sale agreements or making promises about transfers until their authority and the ownership position have been checked.

## Paying the Funeral Before Probate

Funeral expenses are usually among the earliest costs arising after death. They also occupy a special practical position because the funeral cannot normally wait for the probate process to finish.

Many banks have procedures that may allow a funeral invoice to be paid directly from an account held solely by the deceased. This does not usually mean the executor receives unrestricted access to the account.

Instead, the bank may pay the funeral provider directly after receiving documents such as:

– A completed deceased-customer form
– The funeral invoice
– Proof of death
– Identification for the person making the request
– A copy of the will
– Evidence showing the requester’s relationship to the estate

Each bank determines its own documentary requirements. Approval should not be assumed, and the executor should contact the bank before promising payment.

The bank may distinguish between the core funeral account and related expenses. Catering, travel, accommodation, memorial events and family gatherings may not be treated in the same way as the funeral provider’s invoice.

Reasonableness also matters. Funeral expenses are generally paid from the estate, but an executor should consider the estate’s financial position before authorising elaborate arrangements. A modest estate with significant debt should not be committed casually to costs it may be unable to meet.

Every quotation, invoice and payment record should be retained.

## What If Someone Pays the Funeral Personally?

A relative or executor may decide to pay the funeral account from personal funds because payment is urgent or the bank’s process is taking too long.

That person may ordinarily seek reimbursement from the estate, provided the cost was properly incurred and reasonable in the circumstances. Reimbursement is not guaranteed merely because someone chose to spend money.

Before paying personally, record:

– Who approved the expense
– What the payment covered
– Why payment was required
– The amount paid
– The source of the funds
– Whether reimbursement is expected

Keep the invoice and evidence that the payment cleared.

Family members should avoid creating informal arrangements such as, “I will pay the funeral, but I get the car.” That may conflict with the will, the rights of creditors or the proper administration of the estate.

A reimbursement claim should be handled openly through the estate accounts.

## Maintaining the Deceased’s Home

The empty home often creates the largest group of pre-probate expenses.

Necessary payments may include:

– Insurance premiums
– Rates
– Electricity
– Security monitoring
– Urgent plumbing or roofing repairs
– Lawn maintenance
– Body corporate charges
– Mortgage instalments
– Storage expenses

The executor should not cancel everything automatically.

Disconnecting electricity might affect alarms, ventilation or moisture control. Cancelling insurance could expose the estate to a catastrophic loss. Stopping mortgage payments without contacting the lender may create arrears and enforcement costs.

The first step is to notify the relevant organisations that the owner has died. Ask:

– Whether the existing contract remains in force
– Whether the property’s unoccupied status changes the cover
– What payments are immediately required
– Whether temporary arrangements are available
– What evidence of authority is needed
– Whether charges can be deferred until probate

The executor should focus on costs necessary to preserve the property. Renovating a kitchen because it may improve the sale price is a different decision from repairing a burst pipe.

Significant discretionary spending should generally wait until the executor’s authority, the estate’s solvency and the intended treatment of the property are clear.

## Should Automatic Payments Be Cancelled?

Not every direct debit should continue, but not every payment should be stopped.

The executor should review recurring charges individually.

Payments that may need to continue include:

– Insurance
– Rates arrangements
– Mortgage repayments
– Essential utilities
– Security services
– Storage
– Necessary care costs for animals

Payments that may be suitable for cancellation include:

– Entertainment subscriptions
– Optional memberships
– Personal services that can no longer be used
– Non-essential software subscriptions
– Recurring purchases

Contact the provider rather than accessing the deceased’s online account and cancelling services under their identity.

Some automatic payments may stop when the bank restricts the account. The executor should not assume that essential bills are still being paid merely because they were previously set up by direct debit.

Create a list showing the provider, amount, payment date, purpose and action taken.

## Temporary Access Does Not Mean General Access

A bank may agree to make a specific payment before probate without giving the executor access to the whole balance.

For example, the bank might:

– Pay an approved funeral invoice
– Refund an overpayment
– Provide a date-of-death balance
– Release funds under the small-estate provisions
– Deal with a surviving joint holder
– Provide information needed for the probate application

These are limited procedures, not an invitation to begin administering the entire account.

An executor should ask precise questions:

– Can the funeral invoice be paid directly?
– Can necessary information be provided for probate?
– Does the balance fall within the release-without-probate threshold?
– Which documents must be certified?
– Will funds be paid to the executor, the provider or another approved recipient?
– Are there other accounts or liabilities held by the institution?

Keep written notes of the response. Where possible, obtain important instructions in writing.

## The Small-Estate Release Option

New Zealand law allows certain organisations to release qualifying property without requiring probate or letters of administration where the statutory conditions are met.

Since 24 September 2025, the prescribed amount for relevant payments under section 65 of the Administration Act has been $40,000. citeturn485416search1

This does not mean every estate worth less than $40,000 can automatically be distributed without probate. Several cautions apply:

– The limit may apply to property held by a particular holder rather than the estate’s total estimated value.
– The institution may require declarations, identification and indemnities.
– The institution may have discretion about whether to release the property.
– Land and other assets may still require a formal grant.
– A later-discovered asset could make probate necessary.
– Release by the bank does not remove the executor’s duties to creditors and beneficiaries.

An executor should not treat the threshold as permission to bypass the will or distribute the money immediately.

Funds released without probate remain estate property. They should be recorded, protected and used according to the estate’s proper priorities.

## Using Personal Funds for Urgent Estate Costs

Sometimes an executor has no practical choice but to cover a modest urgent cost personally.

Examples may include:

– Replacing a broken lock
– Feeding a pet
– Paying an urgent insurance premium
– Preventing water damage
– Obtaining certified documents
– Paying for secure storage

The executor should spend conservatively and distinguish necessity from convenience.

Before paying, consider:

1. Is the expense genuinely urgent?
2. Does it preserve estate value?
3. Could the provider defer payment?
4. Could the bank pay it directly?
5. Is the amount reasonable?
6. Is there evidence that the estate will be able to reimburse it?

Executors should avoid borrowing large sums personally or placing major estate expenses on personal credit without advice. The estate may turn out to be insolvent, the expense may be disputed or reimbursement may be delayed.

A person who spends personal money on the estate becomes a potential claimant for reimbursement. They do not gain ownership of an estate asset or priority over every other liability simply because they paid first.

## Do Not Pay Beneficiaries Before Probate

Beneficiaries may ask for an advance, particularly when they know that cash is sitting in an account.

Before probate, the executor should generally resist these requests.

A beneficiary’s entitlement may be reduced or delayed by:

– Debts
– Funeral and administration expenses
– Tax
– Relationship-property issues
– Estate claims
– A challenge to the will
– Specific conditions in the will
– Insufficient funds
– The discovery of a later testamentary document

Even a payment described as a “small advance” is a distribution. If the estate later needs that money, the executor may have to recover it.

Personal financial hardship does not allow the executor to ignore the legal order of administration.

## Avoid Paying Ordinary Debts Randomly

The executor may receive invoices before knowing whether the estate is solvent.

A solvent estate contains enough value to meet its liabilities. An insolvent estate does not.

When solvency is uncertain, paying whichever creditor contacts the executor first can be dangerous. New Zealand law provides rules relevant to the order in which an insufficient estate is applied to debts, funeral costs and administration expenses. citeturn731491search12

The executor should list all known liabilities before making substantial voluntary payments. Urgent preservation expenses and funeral costs may need immediate attention, but ordinary unsecured debts should not be paid casually where the estate’s position is unclear.

Creditors should be informed that probate is pending and that their claim has been recorded. The executor should not admit a disputed debt without reviewing the supporting evidence.

## Creating a Pre-Probate Expense Register

Good records turn a confusing waiting period into a manageable process.

Create a register containing:

– Date
– Payee
– Description
– Amount
– Who authorised the expense
– How it was paid
– Whether reimbursement is required
– Supporting invoice or receipt
– Reason the expense could not wait
– Current status

Also record money received, including refunds, rent, insurance payments or funds released under a small-estate procedure.

Do not mix estate funds with personal money. When an estate account can be opened, transfer properly released funds into it and maintain a clear transaction history.

An executor who keeps careful records from the first day will find later estate accounting far easier.

## A Sensible Pre-Probate Payment Test

Before authorising any payment, ask four questions.

### Is it legally payable by the estate?

The cost should relate to the deceased, the funeral, the protection of estate property or proper administration.

### Is it necessary now?

A payment that prevents cancellation of insurance is different from a payment for optional improvements.

### Is there a lawful payment method?

Use the bank’s deceased-estate procedure, direct payment by the institution or a documented personal payment. Do not use the deceased’s credentials.

### Can the decision be explained later?

The executor should be comfortable showing the invoice and reasoning to co-executors, beneficiaries, creditors or a court.

If the decision cannot withstand that explanation, it probably should not be made in a hurry.

The weeks before probate are less about spending estate money than preventing avoidable loss. The executor’s task is to preserve options, maintain accurate records and use formal procedures rather than shortcuts.

The estate may temporarily lack accessible cash, but careful administration can keep that inconvenience from becoming a legal or financial problem.

## Frequently Asked Questions

### 1. Can an executor withdraw money before probate?

An executor should not access a deceased person’s sole account using their card, password or online banking details. A bank may permit specific payments or release qualifying funds through its deceased-estate procedures, but unrestricted access commonly requires probate.

### 2. Can the funeral be paid from the deceased’s bank account?

A bank may agree to pay a funeral provider directly from the deceased’s account before probate. The bank will determine what documents it requires and which expenses qualify. The executor or family should contact the bank before paying or promising payment.

### 3. Does a power of attorney still work after death?

No. An enduring power of attorney ends when the person who granted it dies. The former attorney cannot continue using that authority to operate accounts or manage estate property.

### 4. Can the executor pay household bills before probate?

Necessary expenses may be arranged to protect estate property, including insurance, security, rates or urgent repairs. The payment method must be lawful, and the executor should document why the cost was necessary. Optional expenditure should generally wait.

### 5. Can a family member be reimbursed for funeral costs?

A person who pays a reasonable funeral expense personally may usually seek reimbursement from the estate. They should retain the invoice and evidence of payment. Reimbursement depends on the expense being proper and the estate having sufficient funds.

### 6. Can a bank release a small balance without probate?

A bank may be able to release qualifying funds without probate under New Zealand’s small-estate provisions. The relevant prescribed threshold is currently $40,000, but release is not automatic and the bank may require declarations, identification and other documents.

### 7. Can beneficiaries receive an advance while probate is pending?

An executor should generally avoid beneficiary advances before probate and before the estate’s debts, tax obligations and potential claims are understood. An advance is still an estate distribution and may create personal risk if the money is later required.

### 8. What records should the executor keep before probate?

The executor should keep invoices, receipts, bank correspondence, proof of personal payments, records of money received, photographs of property and notes explaining significant decisions. Every estate-related transaction should be capable of being traced and justified.