Before rightful heirs and beneficiaries get their share of their deceased loved one’s estate, the personal representative must first pay all debts and taxes.
For executors and administrators, it is essential to know the order of priority to ensure they are administering the estate properly. For heirs and beneficiaries, knowing the payment order and the decedent’s actual obligations can set their expectations as to what they would receive.
Payment by the list
According to California probate laws, an estate’s personal representative shall pay all of the deceased owner’s debts in the following order:
- Obligations to the U.S. government and California
- Expenses related to the estate’s administration
- Secured debts
- Funeral costs
- Medical and other expenses associated with the treatment of the deceased’s last illness
- Family allowance
- Wage claims
- Other obligations, including unsecured debts
The priority of the order of payment only applies to the general classes. The law does not give any preference for whom the estate pays first if there are multiple claims under one class.
Moreover, if the estate assets are insufficient to pay all debts of any class, the personal representative shall pay each debt a proportionate share.
Dealing with uncertainty by seeking guidance
An estate’s distribution process is complex. Not only are there specific procedures to follow, but there are also disputes and probate issues to anticipate. If you are an executor or administrator facing difficulty with your duties or an heir or beneficiary lost in the process, navigating probate with the guidance of a knowledgeable legal representative can help you find your way.