Insolvent Probate Estate Claim-Payment Priority in Louisiana

At a glance

Requirements one by one

Succession charges and the payment tableau

Civil Code art. 3276 names funeral charges, law charges, succession-settlement lawyer fees, and claims arising after death as charges paid before debts the deceased contracted, “except as otherwise provided for herein.” When available funds cannot pay every estate debt, Code of Civil Procedure art. 3303(B) requires the representative’s proposed payment tableau to show total funds and list payments according to creditors’ privileges and mortgages.

General privileges and the family payment

Civil Code art. 3252 identifies funeral charges, judicial charges, last-illness expenses, servants’ wages, and clerks’ and similar salaries as privileges extending to both movables and immovables. If movables free of special privilege suffice, art. 3254 orders general movable privileges: funeral, law charges, last illness, servants’ wages, provisions, then clerks’ and similar salaries. The conditional $1,000 spouse-or-minor-child payment in art. 3252 takes preference over other debts except the named vendor privilege, conventional mortgages, and selling expenses. It requires necessitous circumstances and counts property already owned by the claimant.

Collateral and shortfalls

When movables are insufficient, art. 3253 directs general privileged creditors to immovable proceeds under the next chapter. Under art. 3267, a vendor or other special privilege on an immovable is paid from that property’s price ahead of general privileged debts, except charges necessary to obtain the sale. Article 3269 then puts general privileges ahead of other mortgage creditors on immovable proceeds; the least ancient mortgage bears the resulting loss first, while equal-date mortgages share that loss pro rata. Article 3270 directs any remaining loss from an insufficiency to inferior privileged ranks. For creditors without a legislated preference, art. 3134 instead distributes sale proceeds ratably.

What trips people up

The general order in art. 3254 applies when movables not subject to a special privilege can pay the general privileged claims. Article 3255 sends an estate with encumbered movables and too little remainder to more specific rules; a representative should not apply the six general classes as an unconditional estate-wide ladder. Nor does the general privilege list itself assign taxes a fixed class.

Common questions

Can ordinary creditors demand equal payment with succession-settlement fees? Article 3276 gives succession charges priority over debts contracted by the decedent, subject to its express exception for other provisions of law.

Does a mortgage disappear because funeral costs have a general privilege? No. Article 3267 expressly prefers special immovable privileges from their collateral proceeds, subject to the sale-related charges it names; art. 3303(B) requires mortgages to appear in the proposed payment ranking.

Statutes and sources

• La. Civ. Code arts. 3134, 3252–3255, 3267, 3269–3270, and 3276; La. Code Civ. Proc. art. 3303. Verbatim current official text, URLs, and access dates appear in the source fields above.