Insolvent Probate Estate Claim-Payment Priority in South Carolina
At a glance
| Statutory payment order | § 62-3-805(a) gives five ordered classes when applicable assets cannot pay all claims; § 62-3-807(a) directs payment of allowed claims in priority order after provision for exempt property and other listed obligations. |
|---|---|
| Administration costs | Costs and expenses of administration, including attorney's fees, share class 1 with reasonable funeral expenses (§ 62-3-805(a)(1)). |
| Funeral and last illness | Reasonable funeral class 1; reasonable necessary medical, hospital, and personal-care expenses of last illness, including attendants before death, class 3 (§ 62-3-805(a)(1),(3)). |
| Family and homestead allowances | Exempt property under § 62-2-401, with 2025 $45,000 value ceiling, precedes all claims except class 1; § 62-3-807(a) requires provision for it before payment. |
| Taxes and public claims | Federal-law-preference debts and taxes class 2; state-law-preference debts and taxes, ordered by their own priority and including named medical-assistance recovery, class 4 (§ 62-3-805(a)(2),(4)). |
| Secured claims | § 62-3-809 permits full allowed-claim payment on surrender of security; otherwise deduct agreed/court-determined fair market value after exhaustion or determined value without exhaustion. |
| Support and special debts | The five classes specify no separate support or wage position; the special same-priority loan rule in § 62-3-805(c) gives a lender funding a specific estate claim the funded claim's priority to that extent. |
| General claims | All other claims class 5 (§ 62-3-805(a)(5)). |
| Underfunded class | No same-class preference, except state-law-preference claims in class 4 retain their own statutory order; a due claim does not outrank one not yet due (§ 62-3-805(b)). |
Requirements one by one
Five claim classes
Under § 62-3-805(a), administration costs (including attorney fees) and reasonable funeral costs share class one. Federal-preference debts and taxes follow in class two. Last-illness medical, hospital, and personal-care expenses are third. Debts and taxes with preference under other South Carolina laws, including the named medical-assistance recovery, are fourth. Other claims are fifth. A lender who advances money to pay a specific estate claim assumes that claim's priority to the extent of the loan under § 62-3-805(c).
Family property and secured claims
Under § 62-2-401, exempt property has priority over every claim except class one. The current provision sets a $45,000 value ceiling for eligible property; the 2025 amendment appears in the official code. Under § 62-3-807(a), the law directs the representative to make provision for exempt property and other listed items before paying allowed claims in priority order.
Under § 62-3-809, surrendering security permits payment on the full allowed claim. Otherwise, the creditor's estate payment is reduced by the security value calculated under the applicable exhausted or unexhausted-security route.
What trips people up
Funeral expenses share first class with administration, while last-illness care is third. Under § 62-3-805(b), the law ordinarily bars preferences within a class but preserves the order of state-law-preference claims within class four.
Common questions
Does an already due claim jump ahead of a later-due claim in the same class? No. Under § 62-3-805(b), the law expressly rejects that preference.
Do medical-assistance claims share the federal-preference class? No. Under § 62-3-805(a)(4), South Carolina names medical assistance in the state-law-preference class.
Statutes and sources
- S.C. Code §§ 62-2-401, 62-3-805, 62-3-807, and 62-3-809. 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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