Insolvent Probate Estate Claim-Payment Priority in Nebraska
At a glance
| Statutory payment order | Six claim classes; provide for allowances before paying allowed claims (§§ 30-2487, 30-2489). |
|---|---|
| Administration costs | Class 1; includes asset protection, sale, and estate-business expenses (§ 30-2487(a)(1),(c)). |
| Funeral and last illness | Reasonable funeral class 2; necessary last-illness care class 4 (§ 30-2487(a)(2),(4)). |
| Family and homestead allowances | Homestead and family allowances outrank claims except administration; exempt-property right also yields to specified DHHS claims (§§ 30-2322–2324). |
| Taxes and public claims | Federal preferences class 3; other Nebraska preferences class 5; specified DHHS claims class 4 (§ 30-2487(a)(3)–(5)). |
| Secured claims | Surrender collateral for full allowed amount; otherwise deduct its value (§ 30-2491). |
| Support and special debts | Specified DHHS § 68-919 claims join last-illness class; family support is a separate allowance (§§ 30-2487(a)(4), 30-2324). |
| General claims | All remaining claims are class 6 (§ 30-2487(a)(6)). |
| Underfunded class | No preference within one class, even for a currently due claim (§ 30-2487(b)). |
Requirements one by one
Administration and the claim order
Under § 30-2487(c), administration expenses include taking control of and protecting estate assets, selling them, and continuing an estate business for the estate's benefit. Under § 30-2489, the representative reserves for unresolved and still-presentable claims before paying allowed claims after the creditor-notice period.
Allowances outside the claim ladder
Under § 30-2322, the homestead allowance precedes claims other than administration expenses. Under § 30-2324, the family allowance has similar priority but follows the homestead allowance too. Under § 30-2323, the exempt-property right yields to administration expenses and specified Department of Health and Human Services claims. A deficiency made up from other assets also yields as necessary for homestead and family allowances.
Secured claims
Under § 30-2491, surrendering security uses the entire allowed claim as the payment basis. Otherwise the statute deducts the collateral's value under the applicable route. The six classes do not themselves decide the validity of a lien.
What trips people up
Section 30-2487(a)(4) puts claims filed by the Department of Health and Human Services under § 68-919 in the last-illness class; § 30-2323 gives those claims a separate exception to exempt-property priority. The state code also sets higher homestead and exempt-property allowance amounts for deaths beginning January 1, 2027 (§§ 30-2322–2323); the amounts are covered in the allowance survey, while the payment-priority rules stated here remain the same.
Common questions
Are funeral and last-illness expenses in the same class? No. Section 30-2487(a)(2),(4) places them in classes two and four.
Does a claim already due outrank a claim due later in the same class? No. Section 30-2487(b) rejects that preference.
Statutes and sources
- Neb. Rev. Stat. §§ 30-2487, 30-2489, 30-2491, and 30-2322–2324. Verbatim official text, section 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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