Who can be Reimbursed for Payment of Expenses for an Estate?
After the passing of a loved one, the family members of the deceased will be faced with estate debts and expenses. Some examples of debts and expenses are funeral bills, credit card balances, mortgage liens, and the cost of estate administration.
In general, debts and expenses should be satisfied from the deceased’s assets. But sometimes the deceased’s accounts cannot be readily accessed at the time an expense is due. A family member may advance the payment for one or more expenses with the expectation of being reimbursed.
What Expenses are Reimbursable?
All of the reasonable costs of administration of the estate can be reimbursed to the person who advanced the cost. Two obvious examples are payment of funeral costs and professional fees, such as a lawyer or accountant.
What Happens if the Estate is Insolvent?
If the debts and expenses of the estate are greater than the assets, then the order of payment is important. The order of payment for insolvent estates is set forth in 20 Pa. C.S. § 3392:
(1) The costs of administration.
(2) The family exemption.
(3) The costs of the decedent’s funeral and burial, and the costs of medicines furnished to him within six months of his death, of medical or nursing services performed for him within that time, of hospital services including maintenance provided him within that time, of services provided under the medical assistance program provided within that time and of services performed for him by any of his employees within that time.
(4) The cost of a gravemarker.
(5) Rents for the occupancy of the decedent’s residence for six months immediately prior to his death.
(5.1) Claims by the Commonwealth and the political subdivisions of the Commonwealth.
(6) All other claims.
What are the Costs of Administration?
Costs of administration are the most significant estate costs. These costs include the administrator’s commission (unless waived), attorney and accountant fees, and inheritance taxes. Thereafter, all the debts left by the deceased are satisfied.
The beneficiaries to the estate receive the net proceeds of the estate after payment of the debts and expenses.
As a probate law firm for estate executors, we help settle estates efficiently and reduce stress. If you know someone faced with a probate process or roadblocks to an estate property sale, please have them contact us for a free evaluation at:
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