Many people assume they have a right of inheritance when someone dies. Spouses, children and other immediate family members are the legal heirs who inherit from an estate if the deceased person does not have a will.
People can also establish wills that name various different individuals as their beneficiaries. Friends, unmarried romantic partners and others who are close to an individual can inherit as beneficiaries even if they are not legally the heirs of an estate.
Regardless of whether an estate might pass to heirs or beneficiaries, those expecting to inherit aren’t the first priority during estate administration. There are other obligations that take precedence during the probate process.
Probate costs
Personal representatives administering an estate generally need to set aside enough money to cover probate expenses. Court costs and attorney fees take priority over most other financial obligations during estate administration.
Taxes
There are a variety of taxes that may apply to an estate. The deceased individual and the estate itself may owe income taxes. If the estate is particularly large, there could be estate taxes to cover as well. Covering tax responsibilities typically takes priority over making distributions to heirs or beneficiaries.
Personal debts
Any legitimate financial obligation owed by the decedent may take priority over inheritance rights. Credit card balances, student loans and judgments from lawsuits may all take priority over the distribution of assets to heirs or beneficiaries.
Personal representatives administering estates generally need to ensure that they fulfill financial responsibilities before making distributions from an estate. Failure to do so could lead to personal liability. Learning more about probate rules can help personal representatives limit their risk and those inheriting from an estate temper their expectations.