Clients often ask how funeral expenses are handled in a probate case. It’s a little odd to treat an expense that is incurred after death as a creditor claim, which is incurred prior to death. All other expenses incurred after death are treated as administrative expenses.
Funeral expenses require a creditor claim to be filed in the probate case
Unlike other expenses incurred after death, in order for the funeral expenses of the decedent to be paid by the estate through a probate case, the person who paid the funeral expenses must file a creditor claim with the probate court. (Probate Code § 9000(a)(3).)
The creditor claim for funeral expenses must be filed before the latter of four months from when letters are issued to the general personal representative or two months from mailing of notice of administration (Probate Code § 9100). However, the creditor claim must be filed within one year of the death of the decedent (Code of Civil Procedure § 366.2).
Without a properly filed creditor claim, reimbursement from the estate for funeral expenses may be disallowed by the probate judge, even without an objection.
What costs are included in funeral expenses?
Funeral costs include the reasonable cost of interment, family plot, and endowment care “proportionate to the value of the estate in keeping with the standard of living adopted by the decedent,” together with interest beginning 60 days after the date of death. (Health & Safety Code § 7101.)
Anyone besides the administrator or executor paid the funeral expenses
If the administrator or executor has full authority to act under the Independent Administration of Estates Act (“IAEA”), then he or she must pay the funeral expenses to a third-person who paid the funeral expenses as soon as the estate is determined to be solvent and has sufficient funds to pay them (after set-asides for administration and debts owed the United States or the State of California) (Probate Code § 11421.) Expenses of the funeral are payable from the estate even though the surviving spouse or another person is financially able or obligated to pay them. (Probate Code § 11446.)
If a personal representative has limited authority to act under the IAEA and allows the claim for funeral expenses, he or she must submit the claim and allowance to the court for approval or rejection. (Probate Code § 9251(a).) If the representative has allowed the claim, the clerk presents it to the court or judge for approval or rejection. (Probate Code §§ 9250-9251.) The judge then endorses on the claim his or her approval or rejection and the date. (Probate Code § 9251(b).) The court does not take any action on claims rejected by the representative.
The administrator or executor paid the funeral expenses
If the personal representative paid the funeral expenses and wants to be reimbursed by the estate for the funeral expenses, whether acting under full or limited authority under the IAEA, the personal representative must file a creditor claim. (Probate Code § 9000(a)(3).) Then the court must approve the personal representative’s creditor claim prior to reimbursing the funeral expenses to the administrator or executor. (Probate Code § 10501(a)(8); California Rules of Court rule 7.402.)
What happens to the funeral expenses if there isn’t enough money to pay all of the decedent’s bills?
If the estate is insolvent, the funeral expenses are to be paid after the federal or California debts, the expenses of administration and the secured creditors. (Probate Code § 11420(a).)