How Estate Executors Can Pay For Repairs To Homes In Probate


Executors of decedents' estates have an obligation to ensure the assets being transferred to heirs and beneficiaries remain in good condition. It can take 6 months or more for the probate process to be completed, and real estate properties can fall into disrepair during that time, particularly if no one is living in or using them. However, getting money to make the necessary repairs can be challenging. Here are a few ways you can get the cash needed to maintain real estate assets.

Directly from the Estate

The first place you should look for money to maintain the real estate property is in the decedent's other assets, such as bank accounts. In an ideal situation, the decedent would have anticipated the home would need repairs, and they would have left money behind for this eventuality. If he or she didn't, then you would need to dip into the person's checking account to pay for the needed repairs.

As you can imagine, paying for repairs using funds from the estate means there will be less money for the heirs and beneficiaries. Additionally, the money may be earmarked for a specific person, and spending it may result in the person not receiving his or her inheritance, thus violating the directives in the will. Thus, you need to be mindful of where you're getting the cash and take steps to minimize the damage.

For instance, if money is being left to the person who will ultimately inherit the home, let the person know the home needs to be fixed and ask permission to use the cash earmarked for him or her to make repairs. Be sure to get the person's acquiescence in writing to cover your legal bases.

Insurance Company

Depending on the type of repairs needed, you could file a claim with the insurance company and have the provider pay for to have the home fixed. Of course this means the damage to the home must be covered under the homeowner's insurance policy. For example, a tree branch breaks and puts a hole in the roof. This is covered by homeowner's insurance policy, so the company will typically pay the claim.

Be aware there may be a deductible that must be paid before the insurance company will cut a check for repairs. This money can come from the estate. As noted previously, though, you need to be careful about where you get it and obtain any permission from the heirs as necessary.

From the Lender

Mortgage lenders require homeowners to keep their properties in good condition to protect the properties' value. In some cases where the homeowner is deceased and the property has fallen into disrepair, the lender may fix the home and charge the cost to the estate or add it onto the mortgage loan.

This can be a mixed blessing. Since debts must be paid first from the estate's assets, you won't have to worry about asking permission to use money to repay the lender. On the other hand, this may make it harder for heirs to pay off the mortgage or refinance the loan with a new lender, especially if the mortgage currently exceeds the home's value.

If it seems like this situation may come to pass, review the pros and cons of letting the lender make the necessary repairs, and use alternative means to fix the home if it appears this may place too much of a burden on the estate and the heirs.

There may be other ways to get the money needed to fix a home in probate that needs repairing. Contact a probate attorney for advice on how to proceed and assistance with ensuring all your legal ducks are in a row.


23 October 2017

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