Legal Question in Wills and Trusts in Pennsylvania

No, but your focus is not quite right. Its not whether your debts exceed your assets but the kind of debt. Where there is enough money in your probate assets, then all claims are satisfied. Where your probate assets are outweighed by just debts/claims against your estate, then the personal representative's task is to pay the debts/claims in order of priority as per the state law. Generally, expenses incurred for the administration of your estate come first, This includes the family allowances. After that comes your funeral expenses. It goes on down the line to medical expenses incurred within the last 6 months of death and fnally everything else. If your estate runs out of money at any stage, then any creditors below that do not get anything.

Your heirs are not personally responsible for your debts unless they signed a contract agreeing to be responsible. However, your heirs cannot keep probate assets (like a vehicle or other valuables) and not pay the bills. In such case, the assets may need to be sold or mortgaged so that the funds can go into the estate.

Below is the statute governing the order of payment of claims when the probate assets are insufficient to pay the claims in full: 20 Pa.C.S.A. � 3392 - Classification and order of payment

If the applicable assets of the estate are insufficient to pay all proper charges and claims in full, the personal representative, subject to any preference given by law to claims due the United States, shall pay them in the following order, without priority as between claims of the same class:

(1) The costs of administration.

(2) The family exemption.

(3) The costs of the decedent's funeral and burial, and the costs of medicines furnished to him within six months of his death, of medical or nursing services performed for him within that time, of hospital services including maintenance provided him within that time, of services provided under the medical assistance program provided within that time and of services performed for him by any of his employees within that time.

(4) The cost of a gravemarker.

(5) Rents for the occupancy of the decedent's residence for six months immediately prior to his death.

(5.1) Claims by the Commonwealth and the political subdivisions of the Commonwealth.

(6) All other claims.