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When someone dies, many assume their beneficiaries will immediately receive their inheritance. In reality, several steps must take place first—including paying off the estate’s debts and expenses. Under Georgia law, creditors get paid before heirs or beneficiaries.
If you’re named in a will or serving as an executor, it’s important to understand the legal order of payment before distributions can occur.
The Probate Process Comes First
Before anything can be distributed, the will must go through probate (unless the estate is held in a fully funded trust). The probate process involves:
- Filing the will with the probate court
- Appointing a personal representative (executor)
- Identifying and valuing the estate’s assets
- Notifying creditors
- Paying outstanding debts and expenses
- Distributing remaining assets to beneficiaries
Beneficiaries receive what’s left over after all valid claims have been settled.
What Expenses Are Paid First?
Georgia follows a legal order of priority for how estate funds must be used. These generally include:
1. Funeral and Burial Costs
Reasonable funeral and burial expenses are typically paid first from the estate, especially if no other source (like a pre-paid plan or life insurance) exists.
2. Administrative Expenses
These include:
- Court filing fees
- Attorney’s fees
- Executor compensation
- Appraisal fees or accounting help
- Costs of safeguarding or managing assets
These expenses are considered essential to properly settle the estate.
3. Taxes Owed
If the decedent owed state or federal income taxes—or if estate taxes apply—those must be paid from estate assets. Unpaid taxes take legal priority.
4. Outstanding Debts
Credit cards, personal loans, medical bills, and other unsecured debts must be paid in the order set by Georgia probate law. Secured debts (like mortgages or car loans) are typically handled by either paying the debt or transferring the asset subject to the debt.
👉 Learn more about how estate funds can be used to pay debts
When Do Beneficiaries Get Paid?
Only after the estate’s:
- Debts are settled
- Disputes (if any) are resolved
- Taxes and administrative costs are paid
- Court approval (if required) is granted
If the estate is solvent and the will is clear, this process may take several months. In more complex estates—or if there’s a will contest—it can take a year or more.
Important:
If distributions are made too early and there’s not enough left to cover required debts, the executor may be personally liable for the shortfall.
What If the Estate Is Insolvent?
If the estate doesn’t have enough assets to cover all debts, Georgia law dictates a priority system for what gets paid first. Lower-priority creditors and most beneficiaries may receive nothing.
This is one reason why proper estate planning—including trust-based strategies and debt management—is so important.
How to Protect an Inheritance
If you’re leaving assets to loved ones and want to shield them from unnecessary delays or loss:
- Consider using a revocable living trust to avoid probate
- Keep your estate solvent and clearly documented
- Avoid naming individuals as joint owners without legal advice
- Use beneficiary designations for life insurance and retirement accounts
- Work with an estate planning attorney to structure a plan that prevents confusion
👉 Learn how revocable living trusts help avoid probate delays in Georgia
Let Hurban Law Help You Protect What You’ve Built
Whether you’re administering an estate or creating your own plan, understanding how debts and expenses affect inheritance is critical. At Hurban Law, LLC, we guide Georgia families through probate and estate planning with clarity, efficiency, and legal strength.
Contact us today to make sure your wishes are protected—and your heirs receive what you intend.
