Colorado — Reimbursable Expenses for Maintaining Estate Property Before Sale | Colorado Probate

Detailed Answer — What costs a personal representative can track and seek reimbursement for

When someone appointed to administer a Colorado estate (the personal representative, also called an executor or administrator) preserves estate property before sale, Colorado law allows the estate to pay reasonable and necessary administration expenses. These are costs that protect, maintain, and prepare estate assets for sale so the estate preserves value for heirs and creditors. For an overview of Colorado probate law, see the Colorado Revised Statutes, Title 15 (Probate and Trust Code): https://leg.colorado.gov/content/colorado-revised-statutes, and the Colorado Courts probate resources: https://www.courts.state.co.us/Forms/Forms_List.cfm?Form_Type_ID=37.

Common reimbursable categories

The estate can generally reimburse the personal representative for reasonable and necessary costs including, but not limited to:

Property insurance premiums to protect against fire, theft, liability, and other covered losses while property is part of the estate.
Property taxes, special assessments, and sewer or utility charges to prevent liens and preserve marketability.
Mortgage payments or other secured loan payments on estate real property (if the estate chooses to keep the property rather than immediately sell it).
Routine maintenance and repairs that prevent waste or deterioration: e.g., roof repairs to stop leaks, fixing a broken furnace in winter, boarding up broken windows, pest remediation, mowing and basic landscaping to avoid code violations or neighborhood complaints.
Security measures: alarm systems, temporary locks, boarding, or hiring a security service if there is a heightened risk of vandalism or trespass.
Property management fees or caretaker fees when an agent or company is hired to oversee a vacant property.
Reasonable contractor or vendor fees to make the property marketable (cosmetic repairs, staging, cleanout, hauling away debris), but typically limited to what is necessary to sell in a reasonably short time.
Appraisal, inspection, and environmental assessment costs required to price and market real estate.
Costs directly related to selling the property: real estate broker commissions, advertising, title searches, closing costs, transfer taxes, and recording fees.
Professional fees necessary for administration: attorneys’ fees, accountant fees for estate tax returns or accounting, and court costs — provided they are reasonable and related to estate administration.

What counts as “reasonable and necessary”

“Reasonable and necessary” means the expense is ordinary for protecting or preparing an asset for sale and not an unnecessary luxury or speculative improvement. Examples:

Reasonable: paying a plumber to stop a leak so the home won’t suffer mold damage; replacing a broken water heater that makes the home unsellable.
Possibly unreasonable without court approval: extensive renovations or high-end upgrades intended to increase the sales price beyond what the market supports.

Practical limitations and governance

Colorado probate law and court rules let the personal representative make many routine decisions, but some actions have limits:

If the will or court appointment imposes special restrictions, follow them.
Large, unusual, or discretionary expenditures (major remodels, long-term rental commitments, or selling assets below market value) may require notice to beneficiaries and/or court approval.
If beneficiaries disagree about spending, the personal representative should seek guidance from the probate court to avoid personal liability.

Priority of payment

Generally, administration expenses (including reasonable costs to preserve estate property) are paid from the estate before distributions to beneficiaries. Colorado’s probate provisions describe priorities for claims and administration expenses in Title 15. If you need to confirm precise priority rules for a specific estate, consult the statutes and consider asking the court or an attorney for guidance: https://leg.colorado.gov/content/colorado-revised-statutes.

Documentation and best practice for reimbursement

The single most important thing for later reimbursement is clear, contemporaneous documentation. Follow these steps:

Open and use an estate bank account for all estate receipts and expenditures. Do not mix estate and personal funds.
Keep receipts, invoices, contracts, estimates, canceled checks, and credit card statements for every expense.
Record the purpose of each expense and how it protected or prepared the property for sale (for example, “replaced roof to stop water damage” or “paid homeowner’s insurance policy through 6/30”).
Get written bids for repairs and keep before/after photos for material repairs or cleanup.
When hiring contractors, use licensed and insured vendors and keep copies of licenses and certificates of insurance when available.
If you pay personally for an estate expense, document the payment fully and submit a reimbursement request with supporting invoices and proof of payment.

When to get court approval

Obtain probate court approval before incurring large or non-routine expenses, or when beneficiaries object. Examples that typically warrant prior court authorization:

Major renovations or improvements rather than repairs.
Entering into long-term leases or management contracts.
Selling estate property under unusual terms (private sales to relatives, sales well below appraised value, or on credit).
Seeking to pay unusually large attorney or professional fees.

Requesting a court order protects the personal representative from claims of impropriety and helps avoid personal liability.

Disputes and resolution

If a beneficiary disputes reimbursement requests, the options include informal negotiation, mediation, or asking the probate court to resolve the dispute. The court can approve, reduce, or deny reimbursement requests based on the evidence and statutory guidance.

Important: This article explains common practice under Colorado probate law and provides practical steps, but it is not a substitute for professional legal advice. For questions about a particular estate, or for help getting court approval or resolving a dispute, consult a Colorado probate attorney.

Helpful Hints

Open an estate-only bank account immediately and use it for all estate payments.
Document everything: receipts, photos, written estimates, and invoices.
Prioritize expenses that prevent loss (insurance, taxes, security, emergency repairs).
Avoid major improvements without an appraisal and court approval; small repairs to maintain value are safer.
Notify beneficiaries of major expenditures and sales plans to reduce conflict.
When in doubt, get court approval in advance for large or unusual expenses to avoid later challenges.
Keep contractors’ licenses and proof of insurance; this reduces risk to the estate and supports reimbursement requests.
Track time spent by the personal representative; some courts allow reasonable administrative compensation or reimbursement for documented out-of-pocket costs.
Consult Colorado’s probate statutes (Title 15) and the local probate court rules for procedural requirements: Colorado Revised Statutes, Title 15 and the Colorado Judicial Branch probate forms: https://www.courts.state.co.us/Forms/Forms_List.cfm?Form_Type_ID=37.

Disclaimer: This content is educational only and does not constitute legal advice. For advice tailored to your situation, consult a licensed Colorado attorney experienced in probate and estate administration.