Philadelphia Estate Planning, Tax & Probate Attorney Steven J. Fromm & Associates, P.C. - Pennsylvania Probate: What Debts Take Priority

Pennsylvania Probate Laws: Section 3392: Classification and Order of Payment of Debts, Claims, Administrative Expenses of an Estate

One of the primary responsibilities of a personal representative is to claimants for debts owed the estate. Such debts and claims are usually discovered in the course of the initial steps of an estate administration. In addition, such claims will have been formally presented as a result of the advertisement of grant of letters testamentary or letters of administration. Before any creditor is paid, the executor or administrator should make sure that the estate is solvent. If the assets of the estate are insufficient to pay all proper charges and claims in full, the personal representative, subject to any preference given by law to claims due the United States and to claims of secured creditors who have liens or charges on the decedent's real or personal property, shall pay such charges and claims in the following order. There is no priority as between claims in the same class.

First Priority:

The costs of administration.

Second Priority:

The family exemption

Third Priority

The costs of the decedent's funeral and burial; and

The following items, services rendered or medicines furnished within six months immediately prior to the decedent's death:

Costs of medicines furnished to decedent,
Costs of medical or nursing services performed for him within that time
Hospital services including maintenance provided him within that time
Services provided under the medical assistance program provided within that time
Services performed for him by any of his employees within that time

Fourth Priority

The cost of a gravemarker.

Fifth Priority

Rents for the occupancy of the decedent's residence for six months immediately prior to his death.

Sixth Priority

Claims by the Commonwealth and the political subdivisions of the Commonwealth.

Seventh or Last Priority

All other claims.

Warning: Personal Exposure

If the estate is not solvent, and a creditor is paid more than he is entitled to receive, the executor or administrator can be held personally responsible to the extent of the overpayment. The personal representative also may be personally liable if he or she distributes estate property without having given proper notice to those having a claim against the estate.

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