One of the primary responsibilities and obligation of an executor or administrator or personal representative of an estate is to pay claimants for debts owed by the estate. Such debts and claims are usually discovered in the course of the initial steps of an estate administration. In addition, such claims may have been formally presented to the Register of Wills as a result of the advertisement of grant of letters testamentary or letters of administration.
Before any creditor is paid, the executor or administrator should make sure that the estate is solvent. If the assets of the estate are insufficient to pay all proper charges and claims in full, the personal representative, subject to any preference given by law to claims due the United States and to claims of secured creditors who have liens or charges on the decedent’s real or personal property, shall pay such charges and claims in the following order.
Important Point To Keep in Mind: There is no priority as between claims in the same class.
The costs of administration
The family exemption
The costs of the decedent’s funeral and burial; and
The following items, services rendered or medicines furnished within six months immediately prior to the decedent’s death:
The cost of a grave marker.
Rents for the occupancy of the decedent’s residence for six months immediately prior to his death.
Claims by the Commonwealth of Pennsylvania and the political subdivisions of the Commonwealth of Pennsylvania.
All other claims.
If the estate is not solvent, and a creditor is paid more than he is entitled to receive, the executor or administrator can be held personally responsible to the extent of the overpayment. The personal representative also may be personally liable if he or she distributes estate property without having given proper notice to those having a claim against the estate.
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