Who Gets Paid First During Probate? It’s Not Uncle Sam

One of the more complicated aspects of an estate being probated is, who gets paid first (i.e. in what order are payments to be made from the assets of the estate)?  The answer may surprise you!

            In Illinois, the probate process is governed by the Illinois Probate Act (the “Act”). This Act serves a guideline for the entire probate process. Recall, the probate process takes place when the decedent left either no will or a detailed will expressing the testamentary disposition of his or her assets at death. The Act lays out who can function as an Administrator, what those responsibilities and duties are, and the role/supervision of the Court throughout the entire process. One key part of the Act is that it lists seven classification priorities for the payment of estate claims.

            One might think that the government is always first in line to get paid moneys owed by the estate. However, that is not the case! Courts all across the country and the IRS have concluded that funeral and burial expenses, administration expenses, statutory custodial claims and surviving spouse and minor-child awards are not “debts of the debtor” rather they are viewed as “debts of the estate”. Thus claims of the government do NOT take priority over these items.

            As shown in the chart below, here are the seven classification priorities used to decide payments from the assets of an estate:

Classification PriorityClaims
FirstFuneral and burial expenses, expenses of administration, and statutory custodial claims
SecondThe surviving spouse’s or child award
ThirdDebts due the United States
FourthMoney due employees of the decedent of not more than $800 for each claimant for services rendered within four months prior to the decedent’s death and expenses attending the last illness.
FifthMoney and property received or held in trust by the decedent which cannot be identified or traced
SixthDebts due the state of Illinois and any county, township, city, town, village, or school district located within the state.
SeventhAll other claims

            Probate is a complex process. Boznos Law is well versed in probate administration, estate planning and related areas of law. We remain on top of developments in the field to provide you thorough, up to date legal counsel. Call Bill Boznos today at (630) 375-1958 or contact us at www.boznoslawoffice.com/contact-us through our website at www.boznoslawoffice.com.

Share:

More Posts

Send Us A Message