Can sale proceeds be used to pay estate cleanup costs under Michigan law?

Short answer: Yes — sale proceeds from estate property are estate assets and can generally be used to pay legitimate estate administration expenses such as junk removal and personal‑property cleanup. However, the personal representative must follow Michigan probate rules: keep careful records, follow any limits in the will or court orders, pay higher‑priority claims first, and seek court approval for unusual or large expenses.

Detailed answer — how this works in Michigan

Under Michigan’s Estates and Protected Individuals Code (EPIC), the personal representative (also called an executor or administrator) has the authority and duty to collect estate assets, preserve them, and pay debts and proper expenses of administration before distributing the remainder to heirs or beneficiaries. The proceeds from selling estate property (real estate, vehicles, furniture, etc.) are estate funds, and the same rules that govern other estate money apply to those funds.

Key points to understand:

Proceeds belong to the estate: Money received from selling estate property becomes part of the estate. The personal representative may use estate funds to pay any lawful expense of administration, including removal of junk, cleanup of personal property, securing or preparing property for sale, and costs of storage or disposal.
Priority of payments: Certain obligations and costs have priority. Typical priority order includes funeral expenses, administration costs, taxes, and allowed creditor claims. The personal representative must follow statutory priorities when paying from sale proceeds so creditors and priority claims are not unfairly prejudiced.
Court involvement when appropriate: If the expenses are routine and reasonable (e.g., clearing a house to make it marketable), the representative can usually pay them without prior court approval. For unusually large or disputed expenses, or if the will limits the representative’s authority, the representative should ask the probate court to authorize the expense or sale. The court can approve sales and specific expenses through an order, which reduces risk of later objections from beneficiaries or creditors.
Recordkeeping and accounting: The personal representative must keep receipts, contracts, invoices, and other documentation and include them in the estate accounting filed with the probate court. Good documentation shows that the costs were necessary and reasonable and protects the representative from personal liability.
Special situations — secured loans, liens, and taxes: If the property had mortgages, tax liens, or other encumbrances, sale proceeds may need to be used first to pay those creditors. Estate taxes or final income tax obligations may also have priority. Confirm liens or encumbrances before distributing sale proceeds.
Distribution timing: If the representative distributes funds to beneficiaries before paying known claims or allowed expenses, the representative can be held personally responsible if the estate later lacks funds to pay those claims. It is safer to reserve sufficient funds or obtain a court order approving distributions.

Where to find the rules

Michigan’s probate statutes set out the personal representative’s powers, duties, and priorities. For the full statutory framework, see the Estates and Protected Individuals Code, Chapter 700, at the Michigan Legislature: https://www.legislature.mi.gov/mileg.aspx?page=ChapterIndex&chapter=700

Practical examples (hypotheticals)

Example 1 — Routine cleanout: A decedent left a house full of old furniture and debris. The personal representative sells the house and uses part of the sale proceeds to pay a licensed junk‑removal company and a cleaner to make the property marketable. This is typically reasonable and payable from sale proceeds, provided the costs are documented and reasonable.
Example 2 — Large disputed expense: A company charges an unexpectedly high fee to remove personal property and family members object. The personal representative should either obtain informal agreement from beneficiaries or file a petition with the probate court asking for approval before paying the bill from sale proceeds.
Example 3 — Encumbrances and taxes: A vehicle sold to pay estate bills carries a lien. The personal representative must pay off the lien from the sale proceeds (or otherwise address it) before distributing the remainder to beneficiaries.

What steps should a personal representative take before using sale proceeds?

Confirm you are properly appointed and have authority to act (letters testamentary or letters of authority from the probate court).
Identify and secure estate assets; determine if court approval is required to sell particular assets (real estate often requires notice or approval in some cases).
Get multiple estimates for cleanup or removal work so charges are reasonable.
Keep detailed written records (contracts, invoices, receipts, before/after photos).
Confirm liens, mortgages, and tax obligations that may take priority.
Pay routine, necessary expenses and preserve a reserve for known creditor claims; consider getting the court’s approval before paying large or controversial bills or making distributions.
Include all expenses and receipts in the estate accounting filed with the probate court.

When should you talk to a probate attorney?

Contact a probate attorney when:

Expenses are large, unusual, or disputed by beneficiaries;
You are unsure whether a sale or expense requires court approval;
There are potential tax consequences, claims by creditors, or liens on the property;
You need help preparing or defending an estate accounting.

Helpful links

Michigan Legislature — Estates and Protected Individuals Code (EPIC), Chapter 700: https://www.legislature.mi.gov/mileg.aspx?page=ChapterIndex&chapter=700
Michigan Courts — Probate court information and resources: https://courts.michigan.gov/ (select Probate & Family from the menus)

Helpful Hints

Always treat sale proceeds as estate funds, not personal money.
Keep an itemized binder (or digital folder) of all cleanup and removal receipts tied to specific properties or sales.
Get written bids for cleanouts and compare prices before hiring; document why you chose a particular vendor.
When practical, pay vendors directly from the estate account rather than reimbursing yourself from sale proceeds later.
Hold back a reasonable reserve for claims and taxes until the estate accounting is complete and claims periods have passed.
If beneficiaries agree in writing to a specific expense, include that agreement in the estate file and the accounting you file with the court.

Disclaimer: This article explains general Michigan law and common practice but is not legal advice. It does not create an attorney‑client relationship. For legal advice about a specific estate situation, consult a licensed Michigan probate attorney.