Insolvent Probate Estate Claim-Payment Priority in Indiana
At a glance
| Statutory payment order | Seven classes in Ind. Code § 29-1-14-9(a), paid in statutory order when assets are insufficient. |
|---|---|
| Administration costs | First, excluding funeral, tombstone, and body-disposition expenses (§ 29-1-14-9(a)(1)). |
| Funeral and last illness | Reasonable funeral, tombstone, and body-disposition expenses second; necessary last-sickness medical expenses fifth; public-assistance funeral priority has a cross-referenced limit (§ 29-1-14-9(a)(2), (5)). |
| Family and homestead allowances | Allowances under IC 29-1-4-1 third (§ 29-1-14-9(a)(3)). |
| Taxes and public claims | Federal-law preferred debts/taxes fourth; state-law preferred debts/taxes sixth, with a due-and-payable qualification for property taxes (§ 29-1-14-9(a)(4), (6)). |
| Secured claims | Secured dividends use collateral-value credit under IC 30-2-7; lien enforcement remains available (§§ 29-1-14-6, 29-1-14-15; IC 30-2-7-4). |
| Support and special debts | No separate support or wage class in the seven-class list; public-assistance recovery affects the funeral-priority limit (§ 29-1-14-9(a)(2)–(7)). |
| General claims | All other allowed claims seventh (§ 29-1-14-9(a)(7)). |
| Underfunded class | No preference within a class or for an already-due claim; claims are paid in full or pro rata in administration (§§ 29-1-14-9(b), 29-1-14-15). |
Requirements one by one
Funeral and last-sickness expenses
Under § 29-1-14-9(a)(2), reasonable funeral, tombstone, and body-disposition expenses occupy class two. The statute limits funeral priority over a public-assistance recovery claim for recipients of listed programs by referring to IC 12-14-6, IC 12-14-17, and IC 12-14-21; it does not state a single universal dollar cap. Under § 29-1-14-9(a)(5), necessary medical expenses of the last sickness occupy class five.
Secured claims
Section 29-1-14-6 sends secured-claim payment to IC 30-2-7. That chapter expressly includes administration of insolvent decedents' estates in § 30-2-7-1(a), and § 30-2-7-4 computes a secured creditor's dividend on the claim balance after crediting the value of unreleased, nonexempt security. Under § 29-1-14-15, the statute also preserves enforcement of mortgages, pledges, and other liens in an appropriate proceeding.
Same-class shortfall
Section 29-1-14-9(b) bars preference among claims in the same class and says a currently due claim does not outrank one not yet due. Under § 29-1-14-15, the statute describes payment of claims in full or pro rata in due course of administration.
What trips people up
The allowance under IC 29-1-4-1 is class three under § 29-1-14-9(a)(3), ahead of federal-law preferred debts and taxes in class four. State-law preferences are class six, but § 29-1-14-9(a)(6) says the representative need not pay property taxes unless they are due and payable before the property is delivered.
Common questions
Do last-sickness medical bills share the funeral class? No. Section 29-1-14-9(a)(2) puts reasonable funeral and body-disposition costs in class two; § 29-1-14-9(a)(5) puts necessary last-sickness care in class five.
Where do ordinary allowed claims go? Section 29-1-14-9(a)(7) assigns all other allowed claims to class seven.
Statutes and sources
- Ind. Code §§ 29-1-14-6, 29-1-14-9(a)–(b), 29-1-14-15, 30-2-7-1(a), and 30-2-7-4. Verbatim current official text, chapter 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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