How are creditors paid in probate?

In New York, creditors must be paid before any assets are distributed to beneficiaries in a probate case. The executor of the estate is responsible for identifying creditors and paying them from estate assets. The first creditors to be paid are those who are entitled to priority, including taxes and probate expenses. These expenses are paid before any other debts. After priority creditors are paid, the executor pays all other creditors. Creditors should be paid in the order set out in the statute. After all creditors have been identified, the executor should determine the amount that each creditor is owed. The executor must then pay each creditor in full from estate assets or personal funds. The executor should also keep detailed, accurate accounting of all payments made to creditors. This includes copies of the checks used to pay creditors, along with the date and amount of each payment. The accounting should also include invoices from the creditors and any other documents related to the payment. Once all creditors are paid, the executor can disperse the remaining assets to the beneficiaries. It is important for the executor to comply with all requirements for paying creditors to avoid delays and possible legal action from creditors or beneficiaries.

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