What Happens When an Estate Is Insolvent in Arkansas?
Enter the estate's assets and the claims in each class of Arkansas's 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. Arkansas then pays the claims in 4 classes, in the order its statute sets, and the classes at the end of the order are the ones left unpaid when the money runs outArk. Code § 28-50-106(a)Verified Sep 23, 2026View source.
1. Costs and expenses of administrationArk. Code § 28-50-106(a)(1)Verified Sep 23, 2026View source. 2. Reasonable funeral expenses, reasonable medical and other expenses incident to the last illness, and wages of employees of the decedentArk. Code § 28-50-106(a)(2)Verified Sep 23, 2026View source. 3. Claims based on a liability of the decedent for any state tax debtArk. Code § 28-50-106(a)(3)Verified Sep 23, 2026View source. 4. All other claims allowedArk. Code § 28-50-106(a)(4)Verified Sep 23, 2026View source.
In proportion to their amounts: each claim in the class receives the same share of what it is owedArk. Code § 28-50-106(b)Verified Sep 23, 2026View source.
A personal representative is not personally liable for the decedent's debtsArk. Code Ann. § 28-52-101(d)Verified Sep 23, 2026View source. A personal representative who pays a later class before an earlier class is paid in full is personally liableArk. Code Ann. § 28-50-113(b)-(d)Verified Sep 23, 2026View source. Arkansas's statutes state no rule on the personal representative's personal liability for distributing property to heirs while claims are unpaid.
Arkansas law recognizes that a person named as personal representative may refuse the appointment (Ark. Code Ann. § 28-40-107(a)(3)) but prescribes no particular document. A signed written refusal filed with the court states the refusal on the record. Renunciation of Executor for Arkansas
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