Can an estate administrator claim funeral expenses from insurance proceeds rather than estate assets? - Pennsylvania
The Short Answer
Usually, an estate administrator can only pay (or reimburse) funeral expenses from estate assets that are under the administrator’s control—not from life insurance proceeds that were paid directly to a funeral home or another beneficiary outside the estate. If the insurer paid the funeral home based on an assignment/claim signed by the funeral home and an heir, the administrator may have limited ability to “pull back” those insurance proceeds unless the policy was payable to the estate or there is a valid legal basis to challenge the payment.
What Pennsylvania Law Says
In Pennsylvania, funeral and burial costs are recognized as a high-priority obligation of an estate when the estate has applicable assets to pay claims. But that priority rule generally governs how a personal representative pays claims from estate property. Life insurance proceeds often pass outside probate when they are payable to a named beneficiary, and those funds are typically not “estate assets” the administrator can use unless the policy is payable to the estate.
The Statute
The primary law governing priority of funeral expenses as an estate claim is 20 Pa.C.S. § 3392.
This statute establishes that, when estate assets are insufficient to pay everything, the personal representative must pay claims in a specified order—and it places funeral and burial costs near the top of that list.
Separately, Pennsylvania law also allows certain limited payments to be made directly to family members or funeral directors without a full estate administration in specific situations. See 20 Pa.C.S. § 3101 (including provisions addressing small payments and certain life insurance amounts payable to an estate under limited conditions).
For more background on how insurance proceeds may (or may not) flow through probate, you may also find this helpful: Do life insurance proceeds need to be deposited into a parent’s estate account during probate in Pennsylvania?
Why You Should Speak with an Attorney
While the statute provides the general rule that funeral expenses are a priority estate claim, applying it to insurance-funded funeral payments (and an alleged overpayment refund to an heir) is rarely simple. Legal outcomes often depend on:
- Strict Deadlines: Estate administration has court-driven timelines and creditor-claim issues; delays can affect leverage and recovery options, especially if funds have already been paid out and spent.
- Burden of Proof: If the estate is asserting that an heir received an improper refund or that an assignment/claim was improper, the estate may need documentation (policy terms, beneficiary designations, assignment language, insurer claim file, funeral contract, and refund records) to prove entitlement.
- Exceptions: Whether the insurance proceeds were payable to a named beneficiary, payable to the estate, or paid under a small-estate-type mechanism can change the analysis. The validity and scope of any assignment to the funeral home—and whether an heir had authority to sign—can also be outcome-determinative.
In your fact pattern, the involvement of an assignment and claim forms signed by the funeral home and an heir, plus a refund issued to one heir, raises questions about who had the right to direct the insurance proceeds and whether any portion should be treated as belonging to the estate or subject to repayment. Trying to address this without counsel can lead to missteps, including pursuing the wrong party, missing key defenses, or triggering avoidable disputes among heirs.
Related reading: Can I get reimbursed by the estate for funeral expenses I paid in Pennsylvania? and What estate expenses can be paid before beneficiaries receive distributions in Pennsylvania?
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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.