Are Funeral Expenses Paid Before Other Debts

David opened an email from the cemetery three months after his mother’s death—a bill for $18,000 in funeral costs, plus accruing late fees. He’d assumed those bills would be handled through the estate, but now he was facing a personal lawsuit to cover them, and the legal counsel he consulted warned him the estate’s assets were dwindling rapidly. The stress of losing his mother was compounded by the looming financial burden and the unexpected priority of these expenses.

As an Estate Planning Attorney and CPA with over 35 years of experience, I’ve seen this scenario play out far too often. Many people mistakenly believe funeral expenses are automatically prioritized over other debts. While the emotional need to honor a loved one’s passing is strong, California law dictates a very specific order for paying debts, and funeral costs don’t always jump to the front of the line. The nuances can be complex, especially when considering probate procedures and the size of the estate. My advantage as a CPA is I see the step-up in basis issues immediately, along with potential capital gains implications if assets are sold to cover these costs, and I can accurately value estate property for claim purposes.

How California Prioritizes Estate Debts

California’s mandatory payment order, outlined in Probate Code § 11420, establishes a hierarchy for satisfying debts from an estate. Secured debts – those with collateral like mortgages or car loans – typically take precedence. Then come administrative expenses, which include costs directly related to administering the estate, like probate court fees, attorney fees, and CPA fees. Funeral expenses can fall into this category, but it’s not automatic. If the estate lacks sufficient funds, they’re treated like any other general creditor claim.

The Formal Claims Process for Creditors

Creditors, including funeral homes, generally pursue claims through the formal claims system detailed in Probate Code §§ 9000–9399. This involves filing a claim with the probate court within a specific timeframe. The personal representative of the estate (the executor or administrator) reviews these claims, and may accept or reject them. Disputed claims can lead to court hearings and legal battles, further depleting estate assets. It’s critical to understand this process to ensure legitimate claims are honored while protecting the estate from unwarranted demands.

The Strict Deadline for Creditor Lawsuits

Regardless of whether a claim is filed or disputed, creditors in California have a hard one-year deadline to initiate a lawsuit against the estate. This is defined by CCP § 366.2, and importantly, this deadline is NOT tolled by the probate process itself. Even if probate is ongoing, the one-year clock keeps ticking. Missing this deadline effectively extinguishes the debt, but it also opens up potential liability for the personal representative if they prematurely distribute assets before all claims are addressed.

Spousal Liability and Community Property Considerations

A common question is whether a surviving spouse is personally liable for the debts of the deceased. California law distinguishes between debts incurred during the marriage (community property debt) and debts incurred individually. Debts contracted during the marriage are generally the responsibility of the community, while individual debts have a statutory cap on the spouse’s liability, as defined in Family Code § 910 and Probate Code §§ 13550–13554. Understanding the characterization of the debt—community versus separate—is essential to accurately assess spousal risk.

Small Estate Procedures and Simplified Payment

If the estate is small enough – currently Probate Code § 13100 = $208,850 for deaths on/after April 1, 2025 – simplified procedures may be available. These often allow for quicker payment of debts without full probate. However, even in these cases, the rules regarding debt priority still apply, and it’s vital to ensure all legal requirements are met to avoid personal liability.

What standards do California judges use to determine a will’s true meaning?

In California, a last will and testament is reviewed under probate standards that focus on intent, capacity, and execution. Clear drafting reduces ambiguity, limits misinterpretation, and helps families avoid unnecessary conflict during estate administration.

For California residents, understanding how intent, authority, and compliance interact is one of the most effective ways to protect family harmony and estate integrity. A will that anticipates probate scrutiny is far more likely to be honored as written and far less likely to become the source of unnecessary conflict.

Controlling California Statutes on Estate Debts and Creditor Claims

• Debt Priority:
  
  California Probate Code § 11420
  
  Establishes the mandatory statutory order in which estate debts must be paid before any distributions to beneficiaries.
• Probate Creditor Claims:
  
  California Probate Code §§ 9000–9399
  
  Governs how creditor claims must be formally filed in probate and why informal demands, letters, or invoices are legally ineffective.
• Creditor Lawsuit Deadline:
  
  California Code of Civil Procedure § 366.2
  
  Imposes a strict one-year deadline from the date of death for most creditor lawsuits, which is not tolled by probate proceedings.
• Surviving Spouse Liability:
  
  California Probate Code §§ 13550–13554
  
  Limits a surviving spouse’s personal liability for a decedent’s debts to the value of property received under these statutes.
• Small Estate Threshold:
  
  California Probate Code § 13100
  
  Sets the $208,850 small estate affidavit threshold for deaths occurring on or after April 1, 2025.