What are the priorities in paying off an estate’s debts?

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What are the priorities in paying off an estate’s debts?

The estate has little money but many creditors – landlord, utilities, bank loans, etc. How much can the estate’s executor charge on an hourly basis? The estate’s total value is under $10,000 and it will all go to creditors.

Asked on September 18, 2011 under Estate Planning, Colorado

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

When the final inventory is filed with the court setting forth its assets with respect to its liabilities, the attorney representing it will file a petition with it asking the court to issue an order as to how the approved creditor's claims as well as attorney's fees and costs concerning the probate's administration will be paid.

In most situations like the one you have described where there are not enough assets to pay the estate's liabilities, the court will pro-rate the estate's assets amongst the approved creditor claims and the attorneys fees and costs concerning estate's administration. In essence, the creditors will receive so many cents on the dollar on their approved claims by the estate's executor.

Good question.


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