Detailed Answer

This answer explains what kinds of expenses a personal representative (executor or administrator) can reasonably pay or later seek reimbursement for from a New Jersey estate when maintaining real property before it is sold. This is general informational guidance, not legal advice. Consult a probate attorney about your specific situation.

Who pays these costs and how reimbursement works

When someone dies, their estate typically becomes responsible for debts and expenses that are necessary to preserve estate assets, including real property. A personal representative who uses estate funds or pays out of pocket for necessary expenses may be entitled to reimbursement from estate assets. In New Jersey, these duties and allowances generally fall under the state’s probate laws for estates (see N.J.S.A. Title 3B for statutes governing estates and fiduciary responsibilities).

Practically, the representative should:

• Keep detailed records and original receipts.
• Pay routine and emergency expenses to prevent loss of value (utilities, insurance, taxes).
• Seek court approval for extraordinary or disputed expenses when necessary.
• Present the expenses on the estate accounting and request reimbursement or allowance as part of the probate process.

For statutory background on fiduciary duties and estate administration, see the New Jersey statutes on estates: N.J. Statutes, Title 3B (Estates and Transfers).

Common reimbursable expense categories

Below are the typical categories of expenses that are commonly reimbursable from estate funds when they are reasonable and necessary to preserve estate property.

• Mortgage payments and liens: If the property has an outstanding mortgage or other secured lien, continuing timely payments is usually necessary to avoid foreclosure. These payments are typically paid from estate funds or handled by the personal representative and are reimbursable.
• Property taxes and assessments: Current real estate taxes, municipal assessments, and any tax penalties that accrue to preserve the property are usually reimbursable. Paying taxes also prevents tax-sale or liens that reduce estate value.
• Insurance: Costs to maintain homeowner’s or liability insurance on estate property are necessary to protect the asset and are generally reimbursable.
• Utilities and basic services: Electricity, gas, water, sewer, and essential services (trash removal, street lighting assessments) necessary to maintain the property are typically allowed when required to keep the property in salable condition.
• Security and property preservation: Costs for alarm systems, boarding up windows, locks, security patrols, or similar measures to prevent theft, vandalism, or deterioration are usually reimbursable.
• Maintenance and ordinary repairs: Routine upkeep—lawn care, snow removal, minor repairs (roof patching, plumbing or HVAC repairs that prevent further damage)—are generally reimbursable because they prevent loss of value.
• Necessary repairs to make property marketable: Reasonable repairs or cleaning needed to prepare the property for sale (e.g., mold remediation, structural fixes required for sale approvals) can be reimbursable. For significant or expensive improvements, seek court approval first or get estate beneficiaries’ written consent.
• HOA/Condo fees and common charges: Regular homeowners’ association dues or condominium fees required to avoid fines, liens, or suspension of services are typically reimbursable.
• Pest control and environmental remediation: Prompt pest extermination and remediation of hazardous conditions that threaten the property’s value or safety can be necessary estate expenses.
• Advertising and marketing costs: Costs for listing the property, professional photography, staging, and other reasonable selling expenses are generally reimbursable from sale proceeds.
• Realtor commissions and closing costs: Commissions and ordinary settlement costs are paid from sale proceeds and reduce net proceeds to the estate. These are standard and expected reimbursements.

Expenses less likely to be reimbursable

Not all spending is recoverable. Examples of likely nonreimbursable items (unless there is prior court approval or beneficiary agreement):

• Luxury upgrades or nonessential cosmetic improvements that go beyond reasonable preparation for sale.
• Payments that benefit a single beneficiary personally rather than the estate (unless approved).
• Personal expenses of the personal representative not related to estate preservation.

Documentation and accounting: how to prove reimbursements are reasonable

To maximize the chance of reimbursement, follow these best practices:

• Create an estate bank account and pay estate expenses from it when possible.
• Keep original receipts, invoices, contracts, and cancelled checks. Scan and back up copies.
• Maintain a contemporaneous ledger or spreadsheet with date, vendor, purpose, and amount for every expense.
• Get written estimates or multiple bids for large repairs; save before-and-after photos.
• For any expense likely to be challenged (large repairs, improvements, or unusual costs), obtain written approval from beneficiaries or a court order from the probate court.
• Include all expenses in the formal estate accounting filed with the probate court so the court can approve reimbursement when it settles the estate.

When to get court approval

Ordinary, necessary expenses to preserve property are often paid and later accounted for without prior court approval. But you should seek court approval (or beneficiary consent) before incurring large or nonessential expenses. Examples when court approval is advisable:

• Major renovations or capital improvements.
• Signing long-term contracts (e.g., multi-year service agreements).
• Hiring expensive experts or contractors whose fees are high.
• When beneficiaries dispute the payment or reimbursement of the expense.

When in doubt, file a petition with the probate court asking the judge to authorize the expense or confirm reimbursement. The court can issue an order that protects the personal representative from personal liability.

Practical example

Hypothetical facts: An executor discovers a decedent’s house with a leaking roof, unpaid taxes, and the utilities turned off. The executor uses estate cash to:

• Pay two months of property taxes to avoid lien sale;
• Turn utilities back on to prevent pipes from freezing;
• Hire a contractor to patch the roof to stop active leaks;
• Arrange lawn care and secure the home to prevent vandalism;
• List the home with a realtor and pay for professional photos.

These expenses are the type normally reimbursable from estate assets because they preserve the property and prepare it for sale. The executor should keep receipts, photos, and invoices and include all items in the estate accounting. If the roof repair was an extensive structural rebuild, the executor should get beneficiary consent or a court order first.

Next steps and when to consult an attorney

If you are a personal representative, take these steps:

• Open an estate bank account.
• Document and segregate estate expenditures carefully.
• Get estimates for big repairs and, where feasible, beneficiary consent or a court order.
• File required inventories and accountings with the probate court on time.
• Consult a probate attorney if you anticipate disputes, large expenses, or uncertainty about authority to spend estate funds.

For guidance on New Jersey probate procedure and local forms, you can consult the New Jersey courts’ probate resources and the New Jersey statutes on estates at the state legislature website: https://www.njleg.state.nj.us/.

Disclaimer

This information is educational only and not legal advice. It does not create an attorney-client relationship. Laws change and individual cases vary. For advice tailored to your situation, consult a licensed New Jersey probate attorney.