Disclaimer: These codes may not be the most recent version. I make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to any other site. Please check official sources.
New York
Surrogate's Court Procedures Act
§1811 Payment Of Debts And Funeral Expenses
Funeral Expenses
1. The reasonable funeral expenses of the decedent subject to the payment of expenses of administration shall be preferred to all debts and claims against his estate and shall be paid out of the first moneys received by his fiduciary.
2. Every fiduciary must proceed with diligence to pay the debts of the decedent according to the following order:
(a) Debts entitled to a preference under the laws of the United States and the state of New York.
(b) Taxes assessed on property of the deceased previous to his death. Any taxes so paid by a fiduciary on real property which descends to a distributee or passes to a devisee shall be a charge thereon for which the beneficiary must reimburse the estate unless in the case of wills the testator has indicated expressly or by necessary implication that such taxes be otherwise paid.
(c) Judgments docketed and decrees entered against the decedent according to the priority thereof respectively.
(d) All recognizances, bonds, sealed instruments, notes, bills and unliquidated demands and accounts.
3. Preference shall not be given in the payment of a debt over other debts of the same class, except those specified in subparagraph (c) of subdivision 2. A debt due and payable shall not be entitled to a preference over debts not due. The commencement of a suit for the recovery of a debt or the obtaining of a judgment thereon against the fiduciary shall not entitle this debt to preference over others of the same class. Debts not due may be paid according to the class to which they belong, after deducting a rebate of legal interest on the sum paid for the unexpired term of credit without interest. A debt or claim of the fiduciary shall not have preference over others of the same class, except that if the claim of the fiduciary is secured by collateral the fiduciary may apply to the court for leave to surrender the collateral and make payment of the claim upon such conditions as directed by the court. Preference may be given to rents due or accruing on leases held by the decedent at the time of his death over other debts specified in subdivision 2 (d) if it appears to the court's satisfaction that such preference will benefit the estate of the decedent.
4. Dividends payable to secured creditors in insolvent estates shall be computed only upon the difference between the face amount of the claim without security and the value of the security itself as of a date to be determined by the court for the fixation of the rights of creditors, unless the creditor shall surrender his security to the fiduciary, in which event the dividend upon such claim when established as valid shall be computed on the full face amount thereof.
Disclaimer: These codes may not be the most recent version. I make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to any other site. Please check official sources.
Surrogate's Court Procedures Act
§1811 Payment Of Debts And Funeral Expenses
Funeral Expenses
1. The reasonable funeral expenses of the decedent subject to the payment of expenses of administration shall be preferred to all debts and claims against his estate and shall be paid out of the first moneys received by his fiduciary.
2. Every fiduciary must proceed with diligence to pay the debts of the decedent according to the following order:
(a) Debts entitled to a preference under the laws of the United States and the state of New York.
(b) Taxes assessed on property of the deceased previous to his death. Any taxes so paid by a fiduciary on real property which descends to a distributee or passes to a devisee shall be a charge thereon for which the beneficiary must reimburse the estate unless in the case of wills the testator has indicated expressly or by necessary implication that such taxes be otherwise paid.
(c) Judgments docketed and decrees entered against the decedent according to the priority thereof respectively.
(d) All recognizances, bonds, sealed instruments, notes, bills and unliquidated demands and accounts.
3. Preference shall not be given in the payment of a debt over other debts of the same class, except those specified in subparagraph (c) of subdivision 2. A debt due and payable shall not be entitled to a preference over debts not due. The commencement of a suit for the recovery of a debt or the obtaining of a judgment thereon against the fiduciary shall not entitle this debt to preference over others of the same class. Debts not due may be paid according to the class to which they belong, after deducting a rebate of legal interest on the sum paid for the unexpired term of credit without interest. A debt or claim of the fiduciary shall not have preference over others of the same class, except that if the claim of the fiduciary is secured by collateral the fiduciary may apply to the court for leave to surrender the collateral and make payment of the claim upon such conditions as directed by the court. Preference may be given to rents due or accruing on leases held by the decedent at the time of his death over other debts specified in subdivision 2 (d) if it appears to the court's satisfaction that such preference will benefit the estate of the decedent.
4. Dividends payable to secured creditors in insolvent estates shall be computed only upon the difference between the face amount of the claim without security and the value of the security itself as of a date to be determined by the court for the fixation of the rights of creditors, unless the creditor shall surrender his security to the fiduciary, in which event the dividend upon such claim when established as valid shall be computed on the full face amount thereof.
Disclaimer: These codes may not be the most recent version. I make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to any other site. Please check official sources.
PAYING OFF DEBTS OF THE DECEDENT
The debts of an estate must be paid. Debts are to be paid before distribution of estate assets can be made to the beneficiaries. Otherwise, if a claim is made against an estate within the statutory time frame, the Executor, Administrator, Distributees or Beneficiaries of the estate could be held liable for the amount of the claim if it is permitted by the Surrogate's Court.
PRIORITY OF PAYING ESTATE EXPENSES AND DEBTS OF THE DECEDENT
New York law establishes the priority of claims to be paid by an estate:
- Funeral & Administration Expenses
- Federal & State debts
- Taxes Assessed Prior to Death
- Judgments (docketed prior to death)
- Court Bonds, acknowledged financial/contractual obligations and all other debts
INSOLVENT ESTATE
When the estate does not have enough money to pay off all of the debts of the decedent, it is considered an insolvent estate. The estate expenses such as funeral costs and administration expenses are given priority over debts. See also EPTL 5-3.1
The debts of an estate must be paid. Debts are to be paid before distribution of estate assets can be made to the beneficiaries. Otherwise, if a claim is made against an estate within the statutory time frame, the Executor, Administrator, Distributees or Beneficiaries of the estate could be held liable for the amount of the claim if it is permitted by the Surrogate's Court.
PRIORITY OF PAYING ESTATE EXPENSES AND DEBTS OF THE DECEDENT
New York law establishes the priority of claims to be paid by an estate:
- Funeral & Administration Expenses
- Federal & State debts
- Taxes Assessed Prior to Death
- Judgments (docketed prior to death)
- Court Bonds, acknowledged financial/contractual obligations and all other debts
INSOLVENT ESTATE
When the estate does not have enough money to pay off all of the debts of the decedent, it is considered an insolvent estate. The estate expenses such as funeral costs and administration expenses are given priority over debts. See also EPTL 5-3.1
