What Happens When an Estate Is Insolvent?
Choose the state, then enter the estate's assets and the claims in each class of its payment order to see which claims are paid in full, which are paid in part, and which go unpaid, along with when the executor is personally liable.
Frequently Asked Questions
An estate is insolvent when the claims against it exceed the assets available to pay them. Each state sets the order in which those claims are paid. Across the 51 jurisdictions, the order runs from 2 to 14 classes.
In the order set by the statute of the state where the estate is administered. Claims are grouped into classes, and the classes at the end of the order are the ones left unpaid when the money runs out. Selecting a state above shows its classes, each cited to the statute.
In 36 of the 51 jurisdictions, the statute pays the claims within a class in proportion to their amounts. In the rest, the statute sets the rule class by class. The state pages show the rule with its citation.
In 27 of the 51 jurisdictions, the statute states that the executor or personal representative is not personally liable for the decedent's debts. In 24, one who pays a later class before an earlier class is paid in full is personally liable, and in 17, one who distributes property to heirs while claims are unpaid is personally liable. The state pages show each rule with its citation, or that the statute does not state one.
A person named in a will who has not been appointed can decline the appointment. Each state sets how: in 37 of the 51 jurisdictions, the statute provides for a written renunciation filed with the court. The Renunciation of Executorform prepares the writing or the state's official form.
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