Insolvent Probate Estate Claim-Payment Priority in Maryland
At a glance
| Statutory payment order | § 8-105(a) orders twelve classes when applicable assets cannot pay all claims; § 8-108(a) directs payment of allowed claims in that order after six months from death, subject to a court extension. |
|---|---|
| Administration costs | Register fees class 1; administration costs and expenses class 2; personal-representative and legal compensation and licensed broker commissions class 4 (§ 8-105(a)(1),(2),(4)). |
| Funeral and last illness | Funeral expenses class 3, with court allowance capped at $15,000 for an insolvent estate (§§ 8-105(a)(3), 8-106(c)); reasonable medical, hospital, and nursing expenses of last illness class 8 (§ 8-105(a)(8)). |
| Family and homestead allowances | Family allowance class 5 (§ 8-105(a)(5)). |
| Taxes and public claims | Taxes due by decedent class 7; Public Assistance to Adults Program recovery class 11 (§ 8-105(a)(7),(11)). |
| Secured claims | Under § 8-111, surrender security for payment on the full allowed claim; otherwise deduct proceeds from exhausted security or its agreed or court-determined value from the allowed amount. |
| Support and special debts | Unpaid child support class 6; up to three months' rent arrears class 9; wages, salary, or commissions for services in three months before death class 10 (§ 8-105(a)(6),(9),(10)). |
| General claims | All other claims class 12 (§ 8-105(a)(12)). |
| Underfunded class | No claim receives preference over another in the same class; a presently due claim has no preference over one not yet due (§ 8-105(b)). |
Requirements one by one
The payment ladder
Section 8-105 applies when the estate's applicable assets cannot satisfy all claims. It places register fees first and administration costs second. Funeral expenses are third. Compensation for the personal representative, legal services, and licensed broker commissions is fourth; the family allowance is fifth. Child support and taxes follow in classes six and seven.
Last-illness medical, hospital, and nursing expenses are class eight. Up to three months of the decedent's rent arrears is class nine; qualifying recent wages, salary, and commissions are class ten. The named public-assistance recovery is class eleven, and other claims are class twelve. Under § 8-108, the personal representative pays allowed claims in this order after six months from death, unless the court extends the time for good cause.
Funeral and secured claims
Under § 8-106, funeral payment is subject to § 8-105's priorities. The court allows expenses according to the decedent's circumstances; for an insolvent estate the allowance cannot exceed $15,000. Last-illness care has its own later class.
Under § 8-111, the personal representative calculates payment on a secured claim at its full allowed amount if the creditor surrenders the security. Otherwise, the amount payable from the estate is reduced by what the creditor realized from exhausted security, or by the security's agreed or court-determined value when it has not been exhausted.
What trips people up
Section 8-105(b) forbids preferring one claim over another within the same class. A claim already due also has no preference over one not yet due. That equal-rank rule matters when a class cannot be paid in full.
Common questions
Does funeral expense come before the family allowance? Yes. Section 8-105 places funeral expenses third and the family allowance fifth, with professional compensation between them.
Are unpaid child support and taxes in the residual class? No. Sections 8-105(a)(6) and (7) place them in their own classes before last-illness care and general claims.
Statutes and sources
- Md. Code, Est. & Trusts §§ 8-105, 8-106, 8-108, and 8-111. Verbatim official text, links, 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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