Insolvent Probate Estate Claim-Payment Priority in Arizona
At a glance
| Statutory payment order | Six claim classes in § 14-3805(A); separate protected allowance/property rights in §§ 14-2402–2404. |
|---|---|
| Administration costs | First claim class; also excepted from protected allowance/property priority (§§ 14-3805(A)(1), 14-2402(B), 14-2403(D), 14-2404(B)). |
| Funeral and last illness | Reasonable funeral expenses second; reasonable necessary last-illness medical, hospital and attendant expenses fourth (§ 14-3805(A)(2),(4)). |
| Family and homestead allowances | Homestead allowance ahead of claims except administration; family allowance behind homestead, ahead of claims except administration; exempt-property rights similarly preferred (§§ 14-2402(B), 14-2403(D), 14-2404(B)). |
| Taxes and public claims | Federal-law preferred debts/taxes third; Arizona-law preferred debts/taxes fifth (§ 14-3805(A)(3),(5)). |
| Secured claims | Surrender security for allowed amount; otherwise subtract security value under § 14-3809. |
| Support and special debts | No distinct support or wage class in the complete six-class list; other claims fall in class six (§ 14-3805(A)(6)). |
| General claims | All other claims sixth (§ 14-3805(A)(6)). |
| Underfunded class | No preference within a class or for a claim already due (§ 14-3805(B)). |
Requirements one by one
Protected allowances and property
Section 14-2402(B) places the homestead allowance ahead of estate claims except administration expenses. Under § 14-2404(B), the family allowance has similar protection but sits behind the homestead allowance. Under § 14-2403(D), exempt-property rights have priority over claims except administration; assets needed to fill an exempt-property deficiency yield as necessary to pay the homestead and family allowances first.
Secured claims
Under § 14-3809, a secured creditor may receive payment on the allowed claim amount by surrendering the security. If the creditor retains or exhausts it, the estate-payment basis is reduced by the security value under the section's specified method.
Same-class treatment
Under § 14-3805(B), the representative may not favor one claim over another in the same class or prefer a currently payable claim over one not yet due. Section 14-3805(A)(6) assigns all other claims to the sixth class.
What trips people up
The six classes in § 14-3805(A) do not include the homestead or family allowance. Their priority comes from §§ 14-2402(B) and 14-2404(B). Funeral and last-illness categories are based on reasonableness; the priority section states no fixed dollar cap for either.
Common questions
Are federal and Arizona preferred taxes in one class? Section 14-3805(A) ranks debts and taxes preferred under federal law third and those preferred under Arizona law fifth.
Where do last-illness bills rank? Section 14-3805(A)(4) puts reasonable and necessary medical and hospital expenses, including compensation for attendants, in the fourth class.
Statutes and sources
- Ariz. Rev. Stat. §§ 14-2402(B), 14-2403(D), 14-2404(B), 14-3805(A)–(B), and 14-3809. 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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