Debts of Estate

Prior to any distributions of the assets of an estate, the debts of the estate should be reviewed. Section 3392 if Title 20 discusses the priority for payment of the debts of an estate. First, the costs of administration should be covered. These costs can include filing fees for the probate process, attorney fees, advertisement costs and compensation for the executor or administrator. Next, the family exemption of $3,500, applicable in the case of a surviving spouse or children living with decedent at the time of death, is paid. Next, the costs for the decedent’s funeral and burial are to be paid. This can include costs incurred through the funeral parlor, the cemetery, flowers for immediate family and funeral luncheon.

Next in the line of debts to be paid would be medical costs for the decedent for the last six (6) months followed by cost of grave marker and then any rent owed on decedent’s property in the last six (6) months. The final category is any debt owed to the Commonwealth. Other debts in the decedent’s individual name, such as credit cards, are at the bottom of the list. There may also be instructions to pay inheritance taxes from the residue of the estate prior to distribution. It is important to pay these debts in order of priority in any case but particularly where there may not be enough assets in the estate to pay all the debts.