Estate administration has two main goals. One goal is to distribute the assets of a decedent according to the terms of their will. If there is no will, assets are distributed according to the law of intestate succession. The other goal is to pay the decedent’s debts as well as expenses related to estate administration. These two goals can be at odds with each other, particularly if there are not enough assets in the estate to pay all of the debts and also leave the beneficiaries and heirs with much or anything at all.
While the testator’s goal may have been to provide for their family or other beneficiaries, the law generally puts the interests of creditors ahead of the interests of beneficiaries and heirs. Creditors are paid first according to a statutory order of priority. Beneficiaries and heirs receive distributions only if there are assets left over in the estate after creditors are paid and after expenses of administrations are paid.
There are potentially several different types of debts owed by a decedent at the time of their death or expenses incurred during administration. Under SCPA § 1811(1), debt must be paid according to the following order of priority.