Nevada probate law provides a provision for reimbursement of funeral expenses. Funerals usually occur within a few days of death. Often, a family member will personally incur funeral expenses weeks prior to the beginning of formal probate proceedings. Most often, a family member pays the funeral expenses. Later, the family member may seek reimbursement from the estate. In fact, funeral expenses have priority over almost all other creditors and expenses. The estate pays creditors based upon “priority” of type of debt/expense when there are insufficient funds to pay all obligations.
Funeral expenses have priority over all creditors and expenses except expenses of administration (attorneys’ fees and personal representative fees):
NRS 147.195. Debts and charges of estate: Priority of payment. The debts and charges of the estate must be paid in the following order:
1. Expenses of administration.
2. Funeral expenses.
3. The expenses of the last illness.
4. Family allowance.
5. Debts having preference by laws of the United States.
6. Money owed to the Department of Health and Human Services as a result of the payment of benefits for Medicaid.
7. Wages to the extent of $600, of each employee of the decedent[….]
8. Judgments rendered against the decedent in his or her lifetime[…]
9. All other demands against the estate.
My colleague Christopher J. Phillips, Esq., recently brought to my attention a case he litigated that involved a dispute over the reasonableness of funeral expenses (Case No. P-16-087428-E). For the purposes of this post, I am going to change the names of the parties.
Dad died in August of 2015. He left a modest estate worth approximately $33,000.00. The Probate Court must distribute, or “set aside,” estates worth less than $100,000.00 to the surviving spouse or minor children. Dad did not leave a surviving spouse, but did leave a minor child, Son.
Mr. Phillips petitioned the Probate Court to “set aside” the entire estate to Son, his client. Grandma, Dad’s mother, objected and asked the Court to reimburse funeral expenses to her. Grandma submitted documentation for $20,000.00 in funeral expenses. Thus, she requested that the Court distribute 2/3 of the Estate to her. Mr. Phillips argued this request was unreasonable.
The Probate Court refused, reasoning that $20,000.00 of funeral expenses in a $33,000.00 estate was unreasonable.
From the Clark County Probate Court Minute Order:
….As to [Grandma’s] request for funeral expenses and Mr. Phillips’ opposition, [PROBATE] COMMISSIONER RECOMMENDED, FUNERAL EXPENSES LIMITED TO TEN PERCENT (10%) OF THE VALUE OF THE ESTATE. As to Mr. Phillips’ Petition for Payment of Attorney Fees and Costs, COMMISSIONER RECOMMENDED, APPROVED. 6/9/17 9:30 AM Petition to Set Aside Estate Without Administration to Partial Exclusion of Creditors (NRS 146.070(9)).
Thus, the Probate Court reimbursed Grandma for only $3,300.00 of the $20,000.00 in funeral expenses she incurred.