Iowa: Expenses Executors Can Reimburse for Maintaining Estate Property Before Sale

Detailed Answer

When someone dies and leaves real property, the person administering the estate (the personal representative, executor, or administrator) often must maintain the property until it is sold or distributed. Under Iowa probate law (see Iowa Code chapter 633), the personal representative may incur and be reimbursed for reasonable and necessary expenses paid from estate funds. Keep detailed receipts and records because the court, beneficiaries, or accountants will want to see proof.

Common categories of reimbursable expenses include:

• Mortgage payments and other secured debt payments: If the estate continues to be liable on a mortgage or loan, continuing payments to avoid default or foreclosure are generally reimbursable.
• Property taxes and special assessments: Taxes that accrue while the estate owns the property are typically paid from estate funds and later reimbursed to the estate.
• Insurance: Hazard/homeowner/condo insurance and liability coverage to protect the estate property from loss and to limit exposure to claims.
• Utilities and essential services: Electricity, water, gas, sewage, and similar services necessary to maintain the property in saleable condition.
• Security and safety measures: Alarm systems, boarding up, winterization, locks, or temporary fencing needed to protect the property and prevent damage or liability.
• Routine maintenance and minor repairs: Lawn care, snow removal, pest control, clearing debris, fixing leaks, and other work that preserves value and prevents deterioration.
• Necessary repairs to make the property marketable: Repairs that are reasonable and likely to yield a better sale price (for example, repairing a leaking roof versus making luxury upgrades). Major renovations or improvements that substantially change the property’s character may require prior court approval.
• HOA or condominium fees: Assessments or dues that remain payable while the estate owns the unit.
• Appraisal, inspection, and marketing costs: Appraisal fees, home inspection charges, staging or reasonable marketing costs, and listing fees incurred to sell the property.
• Real estate closing costs and commissions: Costs of sale (including standard realtor commission) are normally paid from sale proceeds and accounted for in the final estate accounting.
• Attorney, accountant, and professional fees: Reasonable fees related to administration, tax filings, or matters necessary to preserve the estate’s value.

What is “reasonable” and “necessary” may depend on facts: the property condition, local market, risks of leaving the property vacant, and instructions in the will. Iowa Probate Code gives the personal representative authority to manage the estate and to pay claims and expenses necessary for administration (see Iowa Code chapter 633). Conservatively treat large or unusual expenditures as requiring either beneficiary consent or prior court approval to avoid personal liability.

Practical process for getting reimbursed

1. Open a separate estate bank account and pay estate-related expenses from that account. Do not use the personal representative’s personal account for estate funds.
2. Document every expense: invoice, receipt, contract, canceled check, or credit card statement that ties the payment to the estate property.
3. Keep a running ledger showing date, vendor, purpose, and amount for each expense. Note whether the expense preserved value, prevented loss, or prepared the property for sale.
4. Get multiple quotes for repairs or improvements, and choose bids that are reasonable for the market. Keep beneficiary notice of large repairs when feasible.
5. When the estate accounting is prepared (final accounting or distributions), present the expense documentation. The personal representative’s accounting typically lists administrative expenses and seeks court approval for payment or reimbursement from estate assets.
6. If a beneficiary objects, the court decides whether the expenses were reasonable and allowable. Ask the court to approve large or questionable expenditures before incurring them.

When you should get court approval first

Obtain prior court authorization for actions that are out of the ordinary, such as major renovations, long-term leases, or large expenditures that materially affect the estate’s value. Court orders protect the personal representative from being personally liable if beneficiaries later challenge the spending.

Where to find the governing law

Iowa’s probate statutes govern the powers and duties of personal representatives and provide the framework for estate administration. See Iowa Code chapter 633 for rules about administration, claims, inventories, and accounting: Iowa Code chapter 633 (Probate).

Helpful Hints

• Start an estate bank account early and pay all estate-related expenses from it to create a clear record.
• Keep every receipt, contract, and invoice. Without documentation reimbursement is difficult and often denied.
• Explain planned major repairs to beneficiaries and get written consent if possible. When beneficiaries agree in writing, disputes later are less likely.
• Get written bids for repairs and choose reasonably priced contractors. Avoid unnecessary upgrades that may not bring extra sale value.
• Preserve evidence of why each expense was necessary (photos before/after, inspection reports, contractor statements).
• Consider small emergency measures immediately (e.g., boarding windows after vandalism) to limit further damage; these are often clearly reimbursable.
• For disputed or unusually large expenses, file a petition with the probate court asking for approval before spending. Court authority reduces personal risk.
• Document communications with beneficiaries about estate property decisions and expenses.
• Consult a probate attorney in Iowa when the estate is complex, when large expenditures are proposed, or when beneficiaries disagree.