It is the duty of a legal personal representative to pay the funeral expenses and all the liabilities of a deceased. It is, in fact, the legal personal representative’s first duty to pay the debts of a deceased. If the legal personal representative was aware of a claim by the creditor, he or she will be personally liable to creditors in any instance where he or she distributes assets leaving creditors unpaid.

The legal personal representative also has a duty not to make payment of claims which the legal personal representative does not have to pay as this would result in unnecessarily diminishing the estate, which would be a breach of the duties of a legal personal representative. Similarly, any claims made by the legal personal representative must be paid or denied on these same principles.

The estate proceeds which come into an estate go into the legal personal representative’s hands and the legal personal representative must pay the deceased’s debts from these monies.

See What are the liabilities of the deceased’s estate?

The states’ and territories’ legislation provide a statutory order of payment of funeral, testamentary and administrative expenses, debts and liabilities from an estate. This statutory order of application is subject to any Act regarding a charge on a property and/or any contrary provisions in a will.

The equitable doctrine of marshalling among beneficiaries allows a legal personal representative to make any necessary adjustments prior to distribution of an estate, if the first available assets are not the assets properly liable for the payment of debts in accordance with the relevant legislation.

See Order of application for payment of debts.