How to Handle Debts & Expenses in Probate

Before beneficiaries receive anything, the estate must pay what it owes. This includes debts, taxes, and final expenses. But there’s a legal order you must follow.

💸 What Needs to Be Paid

• Funeral costs and legal fees
  

• Mortgages and car loans
  

• Credit card debt
  

• Medical bills
  

• IRS taxes (income and estate)
  
  

📐 Payment Priority (In Most States)

1. Probate costs and attorney fees
   

2. Secured debts (mortgages, car loans)
   

3. Taxes
   

4. Unsecured debts (credit cards, personal loans)
   
   

⚠️ What If the Estate is Insolvent?

If debts exceed assets:

• Creditors may get partial payments
  

• Heirs may get nothing
  

• Do not distribute assets until all debts are handled