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O.C.G.A. § 53-7-40 indicates which claims get paid first in probate cases. This is particularly important when the estate is not large enough to pay all claims. Section 53-7-40 provides as follows:
Unless otherwise provided by law, all property of the estate, both real and personal, shall be liable for the payment of claims against the estate in the following order:
(1) Year's support for the family;
(2) Funeral expenses, whether or not the decedent leaves a surviving spouse, in an amount which corresponds with the circumstances of the decedent in life. If the estate is solvent, the personal representative is authorized to provide a suitable protection for the grave;
(3) Other necessary expenses of administration;
(4) Reasonable expenses of the decedent's last illness;
(5) Unpaid taxes or other debts due the state or the United States;
(6) Judgments, secured interests, and other liens created during the lifetime of the decedent, to be paid according to their priority of lien. Secured interests and other liens on specific property shall be preferred only to the extent of such property; and
(7) All other claims.
O.C.G.A. § 53-7-41, which appears below, requires creditors to give notice of their claim within 3 months from the date a notice of creditors is published or they lose their priority:
The personal representative shall be allowed six months from the date of the qualification of the first personal representative to serve in which to ascertain the condition of the estate. Every personal representative shall, within 60 days from the date of qualification, publish a notice directed generally to all of the creditors of the estate to render an account of their demands. The notice shall be published once a week for four weeks in the official newspaper of the county in which the personal representative qualified. Creditors who fail to give notice of claims within three months from the date of publication of the personal representative's last notice shall lose all rights to an equal participation with creditors of equal priority to whom distribution is made before notice of such claims is brought to the personal representative, and they may not hold the personal representative liable for a misappropriation of the funds. If, however, there are assets in the hands of the personal representative sufficient to pay such debts and if no claims of greater priority are unpaid, the assets shall be thus appropriated notwithstanding failure to give notice.
O.C.G.A. § 53-7-42 provides for a six month period during which personal representatives can marshall (collect) the estate assets and deal with claims.
(a) The personal representative shall not be required to pay the debts of the estate, wholly or in part, until six months from the date of qualification of the first personal representative to serve. If partial payment shall be made, it shall be pro rata on debts of equal priority, including debts due the personal representative, and shall continue pro rata until the debts of the estate shall be paid out. Successive dividends to creditors shall be made at the end of every year until the estate shall be paid out.
(b) No action to recover a debt due by the decedent shall be commenced against the personal representative until the expiration of six months from the date of qualification of the first personal representative to serve.
O.C.G.A. § 53-7-43 provides: If the estate shall have been distributed to the heirs or beneficiaries without notice of an existing debt, a creditor may compel them to contribute pro rata to the payment of the debt.
O.C.G.A. § 53-7-62 provides that a hearing may be held after the six months has expired from the granting of letters testamentary. This hearing, designed to settle the personal representative's accounts, is conclusive on all parties.
(a) Any person interested as an heir or beneficiary of an estate or the probate court may, after the expiration of six months from the granting of letters, cite the personal representative to appear before the probate court for a settlement of accounts. Alternatively, if the personal representative chooses, the personal representative may cite all the heirs or beneficiaries and all persons who claim to be creditors whose claims the personal representative disputes or cannot pay in full to be present at the settlement of the personal representative's accounts by the court. The settlement shall be conclusive upon the personal representative and upon all the heirs or beneficiaries and all remaining persons who claim to be creditors who receive notice of the hearing. The court may, in the court's discretion, give the personal representative additional time to settle the estate.
(b) If the personal representative fails or refuses to appear as cited, the probate court may proceed without the appearance of the personal representative. If the personal representative has been required to give bond, the surety on such bond shall be bound by the settlement if the surety is given notice by personal service of the settlement proceeding in the probate court. If one or more unsuccessful attempts at service are made by the sheriff or the sheriff's deputies upon the personal representative at the last address of the personal representative in the court records and it appears to the probate court that further attempts are likely to be futile, then service shall be sufficient upon the personal administrator for purposes of this Code section if the citation is mailed by first-class mail to such address.
The Georgia Estate Recovery Rules purport to change the priority of claims, in part, for Medicaid recipients by limiting funeral expenses to $5,000. See Ga. Rules & Regs.§ 111-3-8-.05
© 2004, Elder Law Practice of David L. McGuffey, LLC
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