The distribution of estate assets could be tricky because even before the administrator can distribute the assets to the beneficiaries according to the estate owner’s wishes, the estate has to cover certain debts and costs first. Understandably, this process might gather confusion as to whom the estate pays first. This is why the law provides an order for asset distribution to properly proceed with the probate process.
Hierarchy of distribution
After the administrator gathers a full accounting of the decedent’s estate assets, which can include real and personal property, bank accounts, investments, retirement proceeds and insurance policies, they shall distribute the assets in the following order, if each is applicable:
- Costs of estate administration and attorney fees
- Funeral and burial expenses
- Tax liabilities and government debts, including court costs
- Unpaid medical expenses within the last 60 days before death
- Allowance of surviving heirs and relatives
- Child support
- Business debts acquired after the decedent’s passing
- Other valid claims
It is the administrator’s task to identify and notify the interested parties about the estate owner’s death and the start of the probate estate.
Importance of estate administrator
Even after death, one still has an obligation to pay debts and unpaid expenses. This is why it is important to assign an experienced personal representative. This way, there can be a proper account of the assets and debts and smooth asset distribution. If the administrator properly does these tasks, it can minimize the chances of disputes and conflicts among creditors and beneficiaries.