Section 1811. Payment of debts and funeral expenses 1  

Latest version.
  • The  reasonable  funeral  expenses  of the decedent subject to the
      payment of expenses of administration shall be preferred  to  all  debts
      and  claims against his estate and shall be paid out of the first moneys
      received by his fiduciary.
        2. Every fiduciary must proceed with diligence to pay the debts of the
      decedent according to the following order:
        (a) Debts entitled to a preference under the laws of the United States
      and the state of New York.
        (b) Taxes assessed on property of the deceased previous to his  death.
      Any  taxes  so  paid by a fiduciary on real property which descends to a
      distributee or passes to a devisee shall be a charge thereon  for  which
      the  beneficiary  must  reimburse the estate unless in the case of wills
      the testator has indicated expressly or by  necessary  implication  that
      such taxes be otherwise paid.
        (c)  Judgments  docketed  and  decrees  entered  against  the decedent
      according to the priority thereof respectively.
        (d) All recognizances, bonds, sealed  instruments,  notes,  bills  and
      unliquidated demands and accounts.
        3.  Preference  shall not be given in the payment of a debt over other
      debts of the same class, except those specified in subparagraph  (c)  of
      subdivision  2.  A  debt  due  and  payable  shall  not be entitled to a
      preference over debts not due.  The  commencement  of  a  suit  for  the
      recovery  of  a  debt or the obtaining of a judgment thereon against the
      fiduciary shall not entitle this debt to preference over others  of  the
      same  class.  Debts  not due may be paid according to the class to which
      they belong, after deducting a rebate of legal interest on the sum  paid
      for  the  unexpired  term of credit without interest. A debt or claim of
      the fiduciary shall not have preference over others of the  same  class,
      except  that  if the claim of the fiduciary is secured by collateral the
      fiduciary may apply to the court for leave to surrender  the  collateral
      and  make  payment  of the claim upon such conditions as directed by the
      court. Preference may be given to rents due or accruing on  leases  held
      by  the  decedent at the time of his death over other debts specified in
      subdivision 2 (d) if it appears to the court's  satisfaction  that  such
      preference will benefit the estate of the decedent.
        4.  Dividends  payable to secured creditors in insolvent estates shall
      be computed only upon the difference between  the  face  amount  of  the
      claim without security and the value of the security itself as of a date
      to  be  determined  by  the  court  for  the  fixation  of the rights of
      creditors, unless the creditor  shall  surrender  his  security  to  the
      fiduciary,  in which event the dividend upon such claim when established
      as valid shall be computed on the full face amount thereof.