Insolvent Probate Estate Claim-Payment Priority in Alabama
At a glance
| Statutory payment order | § 43-2-371 orders six debt classes from funeral expenses through other debts. |
|---|---|
| Administration costs | Fees and charges of administration class 2, after funeral expenses (§ 43-2-371(2)). |
| Funeral and last illness | Funeral expenses class 1; expenses of last sickness class 3 (§ 43-2-371(1),(3)). |
| Family and homestead allowances | Homestead allowance has priority over all claims (§ 43-8-110); exempt property also outranks claims but deficiency assets yield to homestead and family allowance (§ 43-8-111); family allowance outranks claims but follows homestead (§ 43-8-112). |
| Taxes and public claims | Taxes assessed on the estate before death class 4 (§ 43-2-371(4)). |
| Secured claims | Unfiled lien claims may be paid by the representative to protect estate assets (§ 43-2-350(b)); § 43-2-371 is a debt-payment ladder, not a determination of lien validity. |
| Support and special debts | Employee debts for services rendered in the year of death class 5 (§ 43-2-371(5)). |
| General claims | Other debts class 6 (§ 43-2-371(6)). |
| Underfunded class | Before six months from letters, no preferential payment among same-class debts; presently due debts do not outrank not-yet-due debts of that class (§ 43-2-372). |
Requirements one by one
Debt classes
Under § 43-2-371, Alabama places funeral expenses first, administration fees and charges second, and last-sickness expenses third. Taxes assessed on the estate before death are fourth. Debts to employees for services in the year of death are fifth, and other debts are sixth.
Family allowances and secured property
Under § 43-8-110, the homestead allowance has priority over all estate claims. Under § 43-8-111, Alabama gives exempt property the same claim priority, but property needed to fill an exempt-property shortfall yields as necessary for earlier homestead and family allowance payments. Under § 43-8-112, the family allowance also has priority over claims but follows the homestead allowance.
Section 43-2-350(b) permits a representative to pay an unfiled lien claim to protect estate assets. The priority list does not decide whether a particular lien is valid or how collateral proceeds are allocated.
Equal rank within a class
Under § 43-2-372, an executor or administrator must not prefer one debt over another of the same class before six months from the grant of letters. A currently due debt also has no preference over another same-class debt not yet due.
What trips people up
Funeral expense precedes administration in the debt ladder. The separate homestead, exempt-property, and family-allowance provisions give those benefits priority over claims; the full distribution sequence must account for both sets of provisions.
Common questions
Are taxes always the highest debt class? No. Under § 43-2-371, Alabama places predeath estate taxes fourth, after funeral, administration, and last-sickness expenses.
Do employee wages share the residual class? No. Under § 43-2-371(5), Alabama separately prefers services rendered in the decedent's year of death.
Statutes and sources
- Ala. Code §§ 43-2-350, 43-2-371, 43-2-372, 43-8-110, 43-8-111, and 43-8-112. Verbatim current official text, URLs, and access dates appear in the source fields above.
Source links
Every statute quoted above, linked, with the date we checked it.
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