Insolvent Probate Estate Claim-Payment Priority in North Carolina
At a glance
| Statutory payment order | Administration first, then nine classes in § 28A-19-6(a); no payment outside class preference (§ 28A-19-13). |
|---|---|
| Administration costs | Paid before the nine claim classes; insolvent-estate representative commissions limited by § 28A-19-6(b). |
| Funeral and last illness | Class 2 funeral expenses preferred to $3,500; class 3 burial place/gravestone to $1,500; class 7 last-illness care up to 12 months (§ 28A-19-6(a)). |
| Family and homestead allowances | Spouse and child allowances exempt from estate claims; spouse precedes child, subject to petition-order waiver (§§ 30-15(d)–(e), 30-17(d)). |
| Taxes and public claims | Federal-preference claims class 4; North Carolina/subdivision-preference claims class 5; DHHS recovery class 6 (§ 28A-19-6(a)). |
| Secured claims | Specific liens class 1 to property value; in-force docketed North Carolina judgment liens class 6 (§ 28A-19-6(a)). |
| Support and special debts | Class 6 includes qualified judgment liens and DHHS recovery; class 7 recent wages and medical claims; equitable-distribution claim class 8 (§ 28A-19-6(a)). |
| General claims | All other claims class 9; funeral/burial caps limit payment preference, not reasonable expense incurred (§ 28A-19-6(a)). |
| Underfunded class | No claim may be paid out of class or above its pro rata share within class (§ 28A-19-13). |
Requirements one by one
Funeral, burial, and recent care
Section 28A-19-6(a) gives funeral expenses a second-class preference up to $3,500. A gravestone and suitable burial place occupy the third class, with a separate $1,500 preferred limit. The statute says these limits restrict payment preference, not the reasonable expense incurred. Medical services in the preceding 12 months, plus drugs and supplies necessary for the last illness of up to 12 months, are seventh-class claims.
Liens and special claims
The first class in § 28A-19-6(a) covers a claim secured by a specific lien only up to the property's value. An in-force North Carolina docketed judgment ranks in the sixth class only to the extent it was a lien on the decedent's property at death. The same class includes Department of Health and Human Services recovery, but earlier docketed sixth-class judgments precede that medical-assistance recovery. The eighth class is a claim for equitable distribution.
An underfunded class
Under § 28A-19-13, a representative may not pay a claim ahead of its class or give it more than a pro rata share within its class. The ninth class receives all claims outside the earlier groups.
What trips people up
Spouse and child allowances are protected under § 30-15(d) and § 30-17(d) from liens and other estate claims. The spouse's allowance normally comes before the child's; § 30-15(e) permits a child to move ahead if the spouse misses the stated petition-order condition. These allowances are outside the nine claim classes. Also, § 28A-19-6(b) limits certain representative commissions when paying them would leave estate claims unpaid.
Common questions
Does a veteran or Social Security benefit reduce the preferred funeral amount? Section 28A-19-6(a) says federal governmental benefits awarded to the estate or beneficiaries do not diminish the $3,500 funeral preference or the separate $1,500 gravestone and burial-place preference.
Where are wages ranked? Section 28A-19-6(a) puts qualifying employee wages in class seven and limits that preference to work within the period the section describes.
Statutes and sources
- N.C. Gen. Stat. §§ 28A-19-6(a)–(b), 28A-19-13, 30-15(d)–(e), and 30-17(d). Verbatim current official text, 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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