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Need help regarding final inventory

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wjclarkrn

Junior Member
What is the name of your state (only U.S. law)? NC

I am the executor of my father's estate. There are 2 claims against the estate. One for around $7k and the other for $600. There is only $500 in the estate account. My father only had a run down van in his name and I sold that. I am trying to close out the estate and wanted to pay the 600 claim but there's not enought to pay the $7k. The clerk of court said i can't pay one and not pay the other and said something about pro-rating assets and told me to hire an attorney:confused:. What does this all mean?
 


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tranquility

Senior Member
From http://www.olsenelderlaw.com/Articles/INSOLVENT ESTATES.doc :
(I'd check the link as it gives a lot of good advice.)
N.C.G.S. §28A-19-6 provides that after payment of costs and expenses of administration, the claims against the estate of a decedent must be paid in the following order:

(1) claims which have a specific lien on property;
(2) funeral expenses up to $2,000 (not including cemetery lot or grave marker);
(3) taxes and claims due the United States;
(4) taxes and claims due the State of North Carolina;
(5) judgments which are a lien on property of the decedent;
(6) wages due an employee of the decedent; and medical services within the last 12 months (including drugs, and medical supplies within that period for the last illness);
(7) all other claims.

There is no preference within a class, so if there are a number of general creditors of the estate, they will share pro rata based on the amount of their claims as provided in N.C.G.S. § 28A-19-13.
Click to expand...
So, if the items you have to pay are from the same class, a pro rata share based on your facts would be:

One for around $7k and the other for $600. There is only $500 in the estate account.
Click to expand...
1. $7,000 + $600 = $7,600
2. 7000/7600 = .921
3. 600/7600 = .079
4. $500 x .921 = $460.50 to the $7,000 debtor.
5. $500 x .079 = $39.50 to the $600 debtor.
 
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wjclarkrn

Junior Member
Thanks for your reply. The $600 is attorney fees from where my dad owed the attorney from years back for will prep. The other $7k is to GM money bank for an ATV that was stolen about 7 years ago. This was a joint account with my husband and its on his credit as well.
 
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TinkerBelleLuvr

Senior Member
It means that you divide the $500 between the two creditors. The bill of $600 is 7.89% of the total amount due; the other's bill is 92.1% of the bill. Multiple those percentages against the $500 and that is what you send to each creditor:

The one owed $600 would get $39.45; the other creditor gets the rest. Probate finalized.
 
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wjclarkrn

Junior Member
I forgot to add.....

Dad had enough in his checking after he passed to pay for the headstone and I used that money for this purpose. The remaining funds came from the sell of the van. I just hate to have to pay an attorney (out of my pocket I'm sure) for this!!!
 
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wjclarkrn

Junior Member
So I shouldn't have paid for the headstone out of the estate?? I didn't have the money to pay for it personally so what happens now?:confused:
 
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tranquility

Senior Member
Look at the rules. Determine for yourself and/or seek council.

Creditors can gain compensation from those who breach their fiduciary responsibilities.
 
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