Q: In a small estate filing, if allowable costs exceed the value of the assets, do estate creditors have to be paid?

A: Section 8-105 of the Estates & Trusts Code governs priority of payments from an estate:(a) If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order:

(1) Fees due to the register;

(2) Costs and expenses of administration;

(3) Funeral expenses as provided in § 8-106 of this subtitle;

(4) Compensation of personal representatives as provided in § 7-601 of this article, for legal services as provided in § 7-602 of this article, and commissions of licensed real estate brokers;

(5) Family allowance as provided in § 3-201 of this article;

(6) Taxes due by the decedent;

(7) Reasonable medical, hospital, and nursing expenses of the last illness of the decedent;

(8) Rent payable by the decedent for not more than three months in arrears;

(9) Wages, salaries, or commission for services performed for the decedent within three months prior to death of the decedent;

(10) Assistance paid under the Public Assistance to Adults Program, as provided in § 5-407(d) of the Human Services Article; and

(11) All other claims.

Therefore, as you go down the list and pay in the order specified, should the money run out, then the lower-preference claims for payment are not paid. This is what is known as an insolvent estate. The PR's duty is to prepare a proposed accounting and distribution of the estate assets showing amounts and to whom paid and for what category, in the order set forth above, and notify all those with lawful claims for whom estate funds are insufficient that their claims will not be paid.