What is the order that items are paid in an estate?

My aunt had a pension that stopped upon her death. They had already direct deposited the next amount after she passed. I was just wondering if there was anything that should be paid before I pay that back. Also, what is the order of things to be paid for future reference.

Asked on September 9, 2011 under Estate Planning, New York

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I am so sorry for your loss.  The debt of the estate that has priority is the funeral bill.  But I really think that it may be best for you to pay back the pension if she - or her estate - was not entitled to collect prior to her death. You do not want to be caught short with paying back the pension money.  The plan administrator will come after you for repayment so please think twice about using the funds.  Now: it is possible that an estate can indeed be insolvent:the debts outnumber the assets.  You can file for bankruptcy for an estate as you do for a person.  Get some legal advice in your area.  Good luck.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If there is an established probate filed with the superior court in the county and state where your aunt had her last known residence before she passed away, then you need to obtain per a court order directions as to how approved claims of creditors are to be disbursed before you even do so.

Do not pay any claims of creditors as to your aunt's probated estate until you receive a court order allowing you to do so and in the stated amount.

If the entity that sent the pension payment inquires about status of repayment, you need to advise it that you need to do so when you receive the court order to do so and not at any time before then.

Good question.


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