What is the order of paying estate creditors?
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What is the order of paying estate creditors?
My father recently died unexpectedly. It turns out he had several bills he did not pay. These include back taxes, hospital bills, and various other creditors. He also never paid my mother (his ex-wife) alimony. He died with only about $1,000 in his bank account and about $27,000 in stock. He has no Will or living trust. He may or may not have a life insurance policy of $100,000 I want my mom to get her alimony before the other bills are paid. Is there a way to do this? Will his creditors take all his money before my mom can get her alimony he never paid? We are having to pay for all the expenses at this point surrounding his death because no one knows if he had life insurance. Also, will this case go to probate since there is no Will?
Asked on September 28, 2011 under Estate Planning, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I am so sorry for your loss. If your Father died with out a Will it in known as intestate and an Administration is generally the proceeding filed in Probate Court. As he did not leave a Will and appoint anyone as the personal Representative of his estate, someone needs to apply to the court to be appointed. The laws in you state will provide for Notice to Creditors and there may be a law in effect in California that provides for an order of payment. Generally the funeral bill is a firth creditor paid. Secured creditors, those with a judgement against the estate, will also have priority. But your state could be like some that provides for first to file a claim, first to be paid. The IRS also generally is a priority creditor. I would have your Mother speak with someone on the issue of back alimony and I would not pay her out of turn from the creditors until you know what the procedure is. Good luck.
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