Detailed Answer
This explains which costs typically come out of an estate to preserve, secure, and prepare real property for sale under Illinois probate practice. It is aimed at someone who is acting (or might act) as a personal representative (executor/administrator) or at beneficiaries trying to understand what the estate can pay. This is general information and not legal advice—consult a licensed Illinois probate attorney about your situation.
Under Illinois law, the personal representative has a duty to preserve and administer estate assets for the benefit of creditors and beneficiaries. The Illinois Probate Act (755 ILCS 5) sets out the personal representative’s powers and duties; many routine preservation and sale-related expenses are normally paid from estate funds. See the Probate Act: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2106&ChapterID=60
Expenses commonly reimbursable from estate funds
The following categories of expenses are typically paid by the estate to preserve property value and prepare property for sale. In most cases you should pay these from an estate bank account and keep records:
- Property taxes and assessments — unpaid real estate taxes, special assessments, or sewer/municipal charges that are liens on the property. Paying these protects the estate from liens that reduce net sale proceeds.
- Insurance premiums — hazard, liability, or flood insurance needed to protect the property while it is in the estate’s possession.
- Utilities and basic services — electricity, gas, water, trash removal, and other services needed to keep the property in a marketable condition.
- Ordinary maintenance and minor repairs — lawn care, snow removal, changing locks, fixing a leaky faucet, replacing a broken window, pest control, and other routine upkeep that prevents deterioration.
- Securing the property — boarding up, security system costs, and costs to remove squatters or unauthorized occupants (sometimes requiring court action).
- Professional fees reasonably related to sale — appraisal fees, inspection fees, property-management fees, licensed contractor estimates, and reasonable accounting charges for estate accounting.
- Costs of marketing and sale — realtor commissions (usually paid at closing), advertising, staging costs (if reasonable), and reasonable closing costs necessary to complete a sale.
- Legal and court costs — probate filing fees, publication fees, and legal fees necessary to administer the estate or to obtain court orders (if required) concerning the property.
- Extraordinary preservation expenses with court approval — major repairs or renovations intended to increase sale value (for example, replacing a roof or doing a full kitchen remodel) are sometimes allowable, but you should obtain court approval before committing large sums. Without prior approval, beneficiaries or the court may later disallow the expense.
- Debt payments secured by the property — mortgage payments or other liens that, if unpaid, would risk foreclosure. Paying these is often necessary to preserve the asset until sale.
What is not typically paid by the estate (or needs caution)
- Major discretionary improvements that change the character of the property and are likely to be challenged if not previously approved by the court.
- Personal expenses of the representative or beneficiaries unrelated to estate preservation (those are not reimbursable).
- Unauthorized cash advances or personal loans to the representative from estate funds without court authority.
How reimbursement works and practical steps
- Open an estate bank account. Deposit estate receipts (sale proceeds, rents, etc.) and pay estate expenses from that account. Do not commingle personal funds.
- Document everything. Keep invoices, receipts, contracts, cancelled checks, bank statements, photos before/after, and written estimates. Detailed records are the foundation of any later accounting or petition for approval.
- Seek court approval for large or non-routine expenses. If an expense is substantial or could be disputed by beneficiaries, file a petition asking the probate court to authorize the expenditure. A court order reduces the risk of later disallowance.
- Provide interim accounting if required. Some courts or beneficiaries may request an inventory and periodic account of receipts and disbursements. Be prepared to show how funds were used to preserve or sell the property.
- Pay priority claims first. Valid secured debts (mortgages, tax liens) generally take priority and must often be addressed before distribution of net proceeds to beneficiaries.
- Get professional help when needed. Use licensed contractors for repairs, licensed brokers for sales, and a probate attorney to handle contested matters or to obtain court instructions.
Potential disputes and how courts view reimbursement
Beneficiaries or creditors can challenge expenditures that they believe are unnecessary or unreasonable. Illinois courts generally allow reimbursement for expenses that are reasonable, necessary, and directly related to protecting or maximizing estate value. Where a personal representative exceeds their authority or spends estate funds for non-estate purposes, the court can order repayment and disallow compensation.
Where to look in Illinois law
The Illinois Probate Act governs the powers and duties of personal representatives and the probate process. For statutory language, consult the Probate Act (755 ILCS 5) on the Illinois General Assembly website: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2106&ChapterID=60
Because practices and court expectations vary by county and by judges, contact a probate attorney in the county where the estate is being administered to confirm local practices and whether court approval should be sought for particular expenses.
Disclaimer: This article is general information about Illinois probate practice and is not legal advice. It does not create an attorney-client relationship. For advice tailored to your facts, consult a licensed Illinois probate attorney.
Helpful Hints
- Open an estate checking account right away and use it exclusively for estate transactions.
- Keep a simple log of each visit to the property noting date, time, purpose, and actions taken. Save photos.
- Collect and keep every receipt, invoice, paid check, and contract related to the property.
- Before doing major repairs, get two or three written estimates and, if in doubt, ask the court to approve the work.
- Pay property taxes and insurance to avoid liens that reduce the estate’s net value.
- Use a licensed real estate broker experienced in probate sales to maximize market exposure and comply with any local probate sale rules.
- Consider a short-term property manager if you cannot check the property regularly; the cost is often justified by preventing larger damage.
- If occupants refuse to leave, consult counsel before taking action—eviction or forcible removal may require court involvement.
- Communicate with beneficiaries about major decisions—early transparency reduces later disputes.
- When in doubt about authority to spend, seek a court order or attorney guidance before committing estate funds.