Detailed Answer
Short answer: Under South Dakota probate law, the personal representative (executor or administrator) may pay and later seek reimbursement from the estate for reasonable and necessary expenses incurred to preserve, insure, maintain, and sell estate property. Reimbursable costs typically include utilities, insurance, ordinary repairs, property taxes, security, advertising and sales costs, appraisal and inspection fees, and similar outlays made for the benefit of the estate. These payments should be documented, reasonable in amount, and either approved by the court or allowed in the personal representative’s final accounting.
Disclaimer: This is general information, not legal advice. I am not a lawyer. If you need legal advice about an estate in South Dakota, consult a licensed South Dakota attorney.
Legal basis (where to look)
South Dakota’s probate statutes set out the duties, powers, and allowed expenses of a personal representative. See South Dakota Codified Laws, Title 29A (Probate) and Chapter 29A-3 (Administration of Decedents’ Estates) for governing provisions and procedures: https://sdlegislature.gov/Statutes/Title/29A and https://sdlegislature.gov/Statutes/Chapter/29A-3. The personal representative’s authority to manage and preserve assets and to incur reasonable expenses generally flows from these provisions and any court orders.
Who may incur reimbursable expenses?
The personal representative appointed by the probate court is the person authorized to act for the estate. In practice, the court can also authorize payment to others (for example, an interested heir who paid for necessary emergency repairs) if the charges are reasonable and shown to benefit the estate. All claims for reimbursement should be submitted to the personal representative or filed with the court as part of the estate accounting.
Common categories of reimbursable expenses
The following expenses are typically considered appropriate to pay from estate funds or to reimburse a representative who paid them personally, provided they are reasonable and necessary to preserve estate value or to prepare the property for sale:
- Utilities (electricity, gas, water, sewer): to prevent damage from freezing pipes, allow access for inspections, and keep the property habitable for viewings.
- Insurance (hazard, liability, and flood where required): to protect the estate from loss while the property remains unsold.
- Ordinary repairs and maintenance (fixing a leaking roof, repairing broken windows, HVAC service, pest control, lawn care, snow removal): costs that prevent deterioration and help the property sell at market value.
- Emergency and safety work (boarding up after vandalism, securing utilities): immediate steps to avoid loss or liability.
- Property taxes, assessments, and homeowner association fees: payments necessary to avoid liens or penalties that reduce the estate’s value.
- Appraisals, inspections, and surveys: fees needed to value the property and to market it effectively.
- Real estate broker commissions and advertising/marketing costs: customary costs of sale once the estate decides to list the property.
- Closing costs and transfer fees: costs related to completing the sale of real property.
- Moving, storage, and clean-out expenses: removing personal property, cleaning the home, or storing items while the sale is arranged.
- Mortgage interest and loan fees: if the estate continues to carry an encumbering loan while the property is marketed, interest and necessary loan payments may be proper administrative expenses.
What is not usually reimbursable
Not every cost a person pays while handling an estate will be reimbursed. Common non-reimbursable items include:
- Personal expenses unrelated to estate preservation (e.g., travel for unrelated matters).
- Excessive or cosmetic upgrades that exceed what is reasonable to prepare the property for sale.
- Unapproved personal loans to the estate without documentation or court approval.
- Expenses that benefit only one beneficiary and not the estate as a whole without prior court approval or written beneficiary consent.
Documentation and reasonableness
To obtain reimbursement you should:
- Keep original receipts, invoices, cancelled checks, and credit-card statements that show the date, payee, and purpose of each expense.
- Keep notes or photos that document the condition of the property and why the work was necessary.
- Obtain and keep bids or estimates for repairs and vendors’ statements when reasonably possible.
- Record approvals from the court or from co-personal representatives or beneficiaries if obtained in advance.
How reimbursement typically happens
There are two common paths for paying or getting reimbursed:
- Payment from estate funds: The personal representative pays expenses directly from estate bank accounts as part of ordinary administration. These payments are reported in the estate accounting and reduce distributable assets.
- Reimbursement to the representative: If the personal representative or another person pays personally, they submit a claim or an itemized request for reimbursement to the personal representative or file it with the probate court. The court may approve reimbursements during interim accountings or in the final accounting.
For significant or unusual expenses, it is safest to obtain prior court approval. The court can approve the expense or order reimbursement as part of the estate’s administration if the expense is reasonable and beneficial.
Practical examples (hypothetical)
Example A: A house has a leaking roof. The personal representative hires a contractor to make necessary repairs to stop water intrusion. The contractor’s invoice, photos of the damage, and a contractor’s estimate support reimbursement.
Example B: The house is vacant in winter. The personal representative pays for winterization, active utilities to prevent frozen pipes, and snow removal for showings. Receipts and a brief entry in the estate ledger document these expenses.
Timing and priority
Administration expenses (including necessary maintenance) are usually paid before distributions to beneficiaries. Some maintenance expenses may take priority over unsecured creditors depending on South Dakota law and the estate’s assets. Proper documentation in the estate accounting helps ensure that reimbursable expenses are allowed.
When to consult the court or a South Dakota attorney
Ask the court or an attorney if:
- Expenses are large, unusual, or disputed by beneficiaries.
- You anticipate a sale that may require major repairs or improvements.
- There are liens, mortgages, or disputes over who should pay repairs.
Helpful Hints
- Open an estate bank account and use it for estate expenses whenever possible to keep personal and estate funds separate.
- Get written estimates for repairs and choose reasonably priced, licensed vendors.
- Keep a simple ledger that lists date, vendor, amount, and purpose for each payment.
- Ask the probate court for prior approval of large or unusual expenses to avoid later disputes.
- Provide beneficiaries with periodic statements showing expenses and the plan for sale to reduce objections.
- Check South Dakota statutes and local court rules for required accountings or deadlines: https://sdlegislature.gov/Statutes/Chapter/29A-3.
- If you are a beneficiary who believes necessary expenses were not paid or were excessive, request a copy of the estate accounting and consult a South Dakota attorney.
Following these steps will help ensure that maintenance and sale-related expenses are allowable, documented, and reimbursable under South Dakota probate practice.