What Happens When an Estate Is Insolvent in Texas?
Enter the estate's assets and the claims in each class of Texas'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. Texas then pays the claims in 8 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 outTex. Est. Code § 355.102Verified Sep 23, 2026View source.
1. Class 1: Funeral expenses (up to $15,000) and last illness expenses (up to $15,000)Tex. Est. Code § 355.102(b)Verified Sep 23, 2026View source. 2. Class 2: Administration expenses and expenses of preserving and managing the estateTex. Est. Code § 355.102(c)Verified Sep 23, 2026View source. 3. Class 3: Matured secured claims (incl. tax liens), to the extent payable from the encumbered propertyTex. Est. Code § 355.102(d)Verified Sep 23, 2026View source. 4. Class 4: Delinquent child support and child support arrearagesTex. Est. Code § 355.102(e)Verified Sep 23, 2026View source. 5. Class 5: Taxes, penalties and interest under the Tax Code and other listed state lawsTex. Est. Code § 355.102(f)Verified Sep 23, 2026View source. 6. Class 6: Cost of confinement established by the Texas Department of Criminal JusticeTex. Est. Code § 355.102(g)Verified Sep 23, 2026View source. 7. Class 7: Repayment of medical assistance paid by the state (Hum. Res. Code ch. 32)Tex. Est. Code § 355.102(h)Verified Sep 23, 2026View source. 8. Class 8: All other claimsTex. Est. Code § 355.102(i)Verified Sep 23, 2026View source.
Texas's statute sets the rule class by class rather than one rule for every classTex. Est. Code §§ 355.108(a), 355.102(d)Verified Sep 23, 2026View source.
Texas's statutes state no rule on the executor's personal liability for the decedent's debts, paying a later class before an earlier class is paid in full or distributing property to heirs while claims are unpaid.
Texas law recognizes that a person named as executor may refuse the appointment (Tex. Estates Code §§ 301.051, 306.001) but prescribes no particular document. A signed written declination filed with the court states the refusal on the record. Renunciation of Executor for Texas
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