Insolvent Probate Estate Claim-Payment Priority in Oklahoma
At a glance
| Statutory payment order | Nine categories run from funeral expenses to specified federal-tax extension interest (§ 58-591); earlier classes must be paid in full first (§ 58-593). |
|---|---|
| Administration costs | Representative may retain necessary administration expenses from funds held; § 58-591(9) separately calls specified tax-extension interest a cost of administration (§§ 58-591, 58-594). |
| Funeral and last illness | Funeral expenses first; last-sickness expenses second; both payable when funds suffice (§§ 58-591(1)-(2), 58-594). |
| Family and homestead allowances | Court-allowed family support funds third; payable when funds suffice (§§ 58-591(3), 58-594). |
| Taxes and public claims | U.S., state, county, and city taxes fourth; debts preferred by U.S. or state law fifth (§ 58-591(4)-(5)). |
| Secured claims | Lifetime judgment liens and mortgages rank sixth by date; mortgage preference reaches only collateral proceeds, with unpaid balance classed among other demands (§§ 58-591(6), 58-592). |
| Support and special debts | Court-allowed family support third; lifetime judgment liens sixth; timely presented or proved demands seventh (§ 58-591(3),(6)-(7)). |
| General claims | Other demands eighth, except specified federal estate or transfer tax extension interest ninth (§ 58-591(8)-(9)). |
| Underfunded class | Proportional dividend for each creditor in an underfunded class; earlier classes paid in full first (§ 58-593). |
Requirements one by one
Payment classes
Under § 591, the list begins with funeral expenses, last-sickness expenses, and court-allowed family support. It then lists government taxes, debts preferred under federal or state law, lifetime judgment liens and mortgages by date, claims presented or proved within the specified period, other demands, and interest from extensions for federal estate or transfer taxes. Under § 593, “no creditor of any class shall receive any payment until all those of the preceding class are fully paid.”
Secured claims
Under § 592, the mortgage preference is limited to proceeds of the mortgaged property. Its express rule sends any unpaid mortgage balance into the class of other estate demands; the priority list itself does not establish lien validity.
Administration and court payment order
Under § 594, the representative may retain necessary administration expenses from funds held. Section 591(9) calls the specified tax-extension interest a cost of administration while expressly placing it ninth in its list. When funds cannot cover allowed debts, § 595 requires the court's decree to state the amount payable to each creditor.
Underfunded class
Section 593 directs a dividend “in proportion to his claim” for each creditor in a class that cannot be paid in full.
What trips people up
Section 594 directs payment of funeral expenses, last sickness, and family allowance once the representative holds sufficient funds, but other debts generally await a court payment order. It also permits the representative to retain necessary administration expenses while applying that command.
Common questions
Does a mortgage's rank apply to every estate asset? No. Section 592 confines that preference to proceeds of the mortgaged property and classifies the unpaid balance with other demands.
Can the representative choose one creditor to pay in full when a class is short? Section 593 instead requires proportional dividends within that class.
Statutes and sources
- Okla. Stat. tit. 58, §§ 591-595. 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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