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Statutory Allowances and Exemptions vs. Creditor Claims

In a continuation of an article published in our October 13, 2015 Newsletter, I spoke about three types of affidavits a surviving spouse may execute regarding the transfer of decedent’s assets without probate. In a blog on October 15, 2015, I covered statutory allowances and exemption for the surviving spouse and minor children, if any; and this month I’ll discuss the priority of such allowances and exemption over certain creditor claims.

 Statutory Allowances and Exemptions vs. Creditor Claims

When the amount in the estate is insufficient to pay out the allowances, exemption and creditor claims, the Arizona Probate Code provides for the priority of payment for these estate expenses.  The only expense that has priority over the statutory allowances and exemption are the estate administration expenses.  If there is no money remaining after payment of one category of expenses, the subordinate expenses remain unpaid. The general order of priority is as follows:

  1. Administration of the Estate;
  2. Homestead Allowance;
  3. Family Allowance;
  4. Exempt Property;
  5. Unsecured Creditors.

If any assets remain after the payment of all estate expenses, the remaining balance will be distributed as provided in the decedent’s will or the intestate laws of the State of Arizona, as the case may be.

Dealing with and managing a decedent’s affairs is never easy. It is important to understand how a decedent’s assets are to be distributed and how your rights and your children’s rights may be protected.  Therefore, it is always recommended that an individual seek council from an experienced probate attorney.

Laura Morrison Trujillo

ltrujillo@mclawfirm.com