FAQ: Paying Estate Administration Costs from Sale Proceeds in Maryland

Short answer: Yes — if you are the personal representative (executor or administrator) in Maryland, you generally may use estate funds, including proceeds from selling estate property, to pay reasonable and necessary administration expenses such as junk removal, cleaning, and personal property cleanup. You must act in the estate’s best interest, document costs, follow probate rules, and get court approval for unusual steps or if beneficiaries or creditors object.

Detailed answer — what Maryland practice requires and why

When someone dies, the personal representative has a duty to collect estate assets, preserve their value, and pay debts and expenses before distributing net assets to heirs or beneficiaries. Reasonable expenses that preserve the estate or make property marketable are normally chargeable to the estate. Typical examples include:

Cleaning a house and removing junk so the property can be shown and sold.
Removing personal property that would interfere with sale or transfer (furniture, appliances, abandoned items).
Paying for storage, towing, or safe disposal of hazardous items.
Minor repairs or staging that are necessary to sell the property for fair market value.

Maryland’s probate system expects the personal representative to pay legitimate administration costs out of estate assets before distributing to beneficiaries. The Maryland Courts provide practical guides on the personal representative’s duties and the probate process, which explain the obligation to pay debts and administration expenses while accounting for them in the estate record. See Maryland Courts — Estate Administration and Probate guides: https://www.mdcourts.gov/legalhelp/estateadministration and https://www.mdcourts.gov/legalhelp/estate/probate.

Limits and common-sense rules

Reasonableness: Expenses must be reasonable in amount and scope. Paying far above market rates for junk removal or unnecessary luxury staging can be challenged.
Necessity: You should be able to justify that the expense was necessary to preserve value or enable sale. Routine maintenance and cleaning typically qualify; discretionary upgrades may not.
Priority: Estate administration costs are paid before distributions. But creditors’ allowed claims generally also get priority. Keep funds available to meet creditor claims where required.
Documentation: Keep receipts, invoices, photos, written estimates, and any communications that show why the expense was necessary for sale or preservation.
Court oversight: If beneficiaries or creditors dispute costs, or if the action is unusual (for example, selling major assets or spending large sums), the personal representative should seek court approval or file accountings with the register of wills or the probate court.

Practical steps a Maryland personal representative should follow

Identify and inventory the property. Take photos of items and the condition of the premises.
Obtain multiple written estimates for removal, cleaning, hauling, storage, or repairs so you can show reasonableness.
Keep all receipts and enter each expense into the estate accounting records.
If money to pay these costs will come from sale proceeds, state that clearly in the sale paperwork and in communications to beneficiaries (for example, “costs of sale and reasonable cleaning/removal to be paid from proceeds”).
If beneficiaries consent in writing to anticipated expenses, the risk of future disputes drops significantly.
If major expenses are anticipated or a beneficiary objects, seek approval from the probate court or register of wills before incurring the cost.

Example (hypothetical)

A Maryland decedent left a house cluttered with old furniture and debris. The personal representative gets three junk-removal estimates: $950, $1,100, and $1,400. To make the house marketable and avoid a depressed sale price, the representative hires the $950 service, documents the estimates and receipts, and pays from the escrowed sale proceeds after closing. The net sale proceeds (after paying the reasonable removal cost, realtor fees, and other allowed expenses) are then included in the estate accounting and distributed according to the will or law.

When you must involve the court

Seek court approval if:

Expenses are unusually large relative to the estate’s value.
A beneficiary or creditor objects and the dispute cannot be resolved informally.
You need to sell real property but lack explicit authority in the will or wish to sell real estate before probate issues are settled. The register of wills or the Orphans’ Court can grant authority or supervise sales.

For guidance on formal court procedures, Maryland Courts’ probate resources explain when and how to request court authorization: https://www.mdcourts.gov/legalhelp/estateadministration.

Accounting and final distribution

The personal representative must include administration expenses and sale proceeds in estate accountings. Beneficiaries have the right to see records and to object if they believe expenses were improper. Good record-keeping (invoices, receipts, estimates, photographs) reduces the chance of disputes and shows you acted in the estate’s best interest.

Helpful Hints

Get at least two written estimates for removal, cleaning, or repairs before hiring a vendor.
Get written consent from beneficiaries when possible before incurring non-routine expenses.
Keep the estate’s bank account or sale escrow separate from your personal accounts. Pay vendors from estate funds, and keep copies of checks and bank statements.
Save before-and-after photos demonstrating the need and the work performed.
If you suspect hazardous waste (chemicals, needles, mold), hire licensed professionals and document the safety need—hazardous disposal often costs more and is clearly justifiable.
If the estate is small and uses simplified procedures, check Maryland’s small estate information with the courts to see whether traditional probate accounting applies: https://www.mdcourts.gov/legalhelp/smallestate.
When in doubt, ask the register of wills or consult a Maryland probate attorney before spending large sums or disposing of potentially valuable personal property.

Where to learn more

Maryland Courts provides plain-language information and forms for personal representatives and probate matters: https://www.mdcourts.gov/legalhelp/estateadministration. For contested matters or complex estates, consider talking with a Maryland probate attorney or visiting the Register of Wills office in the county where the decedent lived.

Disclaimer: This article explains general Maryland probate practices and common steps personal representatives take. It does not provide legal advice and is not a substitute for talking with a qualified Maryland attorney about your specific situation.