The Short Answer

In Pennsylvania, a personal representative (executor/administrator) can generally pay proper estate administration expenses and valid claims before making distributions to beneficiaries. If the estate does not have enough money to pay everything, Pennsylvania law sets a specific priority order that controls what gets paid first.

What Pennsylvania Law Says

Estate funds are typically used first to cover the costs required to administer and close the estate and to pay legally enforceable claims (like certain final medical bills and taxes). Beneficiaries usually receive distributions only after these obligations are addressed—especially where the estate might be insolvent or disputed.

The Statute

The primary law governing this issue is 20 Pa.C.S. § 3392.

This statute establishes the classification and order of payment when estate assets are insufficient, prioritizing (among other categories) costs of administration, the family exemption, and then certain funeral/burial and last-illness expenses before lower-priority claims and before beneficiaries are paid.

In practical terms, expenses that are commonly paid from estate funds before beneficiary distributions (depending on the facts and available assets) often include:

• Costs of administration (e.g., necessary expenses to collect, protect, and manage estate assets, and to complete required filings), which are prioritized under 20 Pa.C.S. § 3392(1).
• Family exemption (a statutory priority item), under 20 Pa.C.S. § 3392(2).
• Funeral and burial costs and certain last-illness expenses (including specified medical/hospital services within six months of death), under 20 Pa.C.S. § 3392(3).
• Cost of a gravemarker, under 20 Pa.C.S. § 3392(4).
• Six months of rent for the decedent’s residence immediately prior to death (as defined by the statute), under 20 Pa.C.S. § 3392(5).
• Claims by the Commonwealth and political subdivisions, under 20 Pa.C.S. § 3392(5.1).
• Other valid claims (credit cards, personal loans, etc.), under 20 Pa.C.S. § 3392(6).

Separately, Pennsylvania law also treats certain distribution-related costs as administration expenses. For example, unless the will provides otherwise, reasonable expenses to store, insure, pack, and deliver tangible personal property to a beneficiary are paid as an expense of administration under 20 Pa.C.S. § 3534.1.

Why You Should Speak with an Attorney

While the statute provides the general priority rules, applying them to a real estate is rarely simple. Legal outcomes often depend on:

• Strict Deadlines: Distributing too early—before identifying and resolving higher-priority claims—can expose the personal representative to disputes and potential personal liability, especially in estates with unclear debts or government claims.
• Burden of Proof: The personal representative may need to justify that a payment was a proper “cost of administration” (and that the amount was reasonable), particularly if beneficiaries object.
• Exceptions: Priority issues can change when there are secured debts, disputed claims, unclear will language, or questions about whether an expense benefits the estate versus a particular beneficiary.

If you are trying to decide what can be paid now versus what must wait, it is worth getting legal advice before writing checks from the estate account. For more Pennsylvania-specific context, you may also find this helpful: What estate expenses can an executor be reimbursed for 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.