How an Estate is settled through Probate depends on the its ability to pay its debt.

If the total value of the deceased's debt is greater than the total value of its Assets, then the Estate is considered Insolvent and it cannot pay its final bills.

In these cases, state law will dictates terms for settling the Estate, instead of typical Probate.

First, Probate Court officially declare the Estate to be Insolvent, and then it will then prioritize payments to creditors, determining which debts should be paid before others.

Payment priorities differ in each state, but are typically made in this order:

• Funerals -- any products and services purchased for Funeral or Memorial Services including burial and cremation


• Family -- payments needed for the ongoing support of family members (ex: spouse, dependent, etc)


• Estate Administration -- costs for managing the Estate including upkeep of property (ex: court and attorney fees)


• Government -- any outstanding payments to the state or federal government including back taxes, interest, or penalties


• High-priority creditors -- expenses related to high priority creditors to whom the deceased owed payment (ex: home mortgage)


• Medical -- expenses related to the medical support of the deceased (ex: hospital or hospice care)


• Unpaid wages -- outstanding payments to employees of the deceased


• General -- additional Unsecured Debts the deceased may have had (ex: credit cards, payday loans)

Since the rules that guide this process differ in each state, review local laws found at the links below.

Before declaring an Estate Insolvent, it's important to determine if certain Assets can be sold to pay outstanding debts and avoid Insolvency.

Consult a Probate Attorney before taking this step because there are specific procedures to declare Insolvency.

See links below for more information on Estate Insolvency and Probate Attorneys for hire