Insolvent Probate Estate Claim-Payment Priority in New York
At a glance
| Statutory payment order | Administration expenses, then reasonable funeral expenses, then § 1811(2) debt order (§ 1811(1)–(2)). |
|---|---|
| Administration costs | Funeral preference is expressly subject to administration expenses (§ 1811(1)). |
| Funeral and last illness | Reasonable funeral expenses ahead of debts, after administration; last-illness bills are not a named preferred class (§ 1811(1)–(2)). |
| Family and homestead allowances | § 1811's funeral-and-debt order does not assign a family-allowance debt class. |
| Taxes and public claims | First preferred debts: federal/New York-law preference; next, taxes assessed on decedent's property before death (§ 1811(2)(a)–(b)). |
| Secured claims | In insolvent estate, dividend uses unsecured face amount less court-dated security value; full-face dividend if collateral surrendered (§ 1811(4)). |
| Support and special debts | Docketed judgments/decrees rank next by their respective priorities; other specified obligations follow (§ 1811(2)(c)–(d)). |
| General claims | Recognizances, bonds, sealed instruments, notes, bills, unliquidated demands and accounts are last listed debt group (§ 1811(2)(d)). |
| Underfunded class | No preference within debt class except judgment/decree priorities; due date or suing fiduciary does not confer preference (§ 1811(3)). |
Requirements one by one
Funeral expenses and debt order
SCPA § 1811(1) places reasonable funeral expenses ahead of all debts and claims, but “subject to the payment of expenses of administration.” Section 1811(2) then orders debts: federal and New York preferred debts; taxes assessed on the decedent's property before death; docketed judgments and decrees by their own priority; then the listed instruments, demands and accounts.
Secured-creditor dividend
In an insolvent estate, § 1811(4) computes a secured creditor's dividend only on the face amount less the security's value on a court-determined date. The creditor may surrender the security; the established valid claim then receives a dividend based on its full face amount.
Same-class treatment
Section 1811(3) generally bars preference within a debt class, except for the judgment and decree priorities in subdivision 2(c). A debt being due, a suit, or a judgment against the fiduciary does not itself move that debt ahead of its class peers.
What trips people up
An assessed property tax paid on real estate passing to an heir or devisee is charged to that beneficiary under § 1811(2)(b), unless a will directs otherwise. That reimbursement feature is separate from the debt's place in the payment sequence.
Common questions
Do all judgments outrank ordinary accounts? Section 1811(2)(c) gives docketed judgments and entered decrees their named place and their respective priority; a judgment obtained against the fiduciary does not give a debt new preference within its class under § 1811(3).
Is there a special last-illness class in this order? Section 1811(2) lists its preferred debt groups without a last-illness category; classification of a particular bill requires applying the listed groups.
Statutes and sources
- N.Y. SCPA § 1811(1)–(4). Verbatim current official text, URL, 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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