Priority Claims for Surviving Spouse and/or Minor Children

July 31, 2017

By: David M. Bastiaans

After losing a spouse, the surviving spouse can feel overwhelmed and anxious regarding available resources.  This is particularly true if the probate estate of the deceased spouse is nominal or the deceased spouse had significant debt.  There are protections for the surviving spouse or possibly minor children that have priority treatment before the estate assets are used to pay estate expenses, debts, or creditors.  The surviving spouse has to make certain claims in a timely fashion in order to gain these protections.  Typically, the surviving spouse only files these priority claims if there are insufficient estate assets to pay all the expenses and debts of the estate.

Virginia code provides the order in which the estate assets are used to satisfy the various classes of creditors to the estate.  Until a category of debt or expense is paid in full, the next category is not entitled to payment.  If there are insufficient assets to pay a category in full, the claimants in that final category receive the remaining assets pro rata based on their claim amount.  The first category is costs and expenses of administration and the second category are allowances (“priority claims”) provided to the surviving spouse.  This means that the priority claims are paid before any other expenses and debts of the estate are paid. 

There are three types of priority claims a surviving spouse may claim –

  • Family Allowance allows the surviving spouse and minor children to receive up to $24,000 ($2,000 per month or in lump sum) for their maintenance during the estate administration. The claim is payable to the surviving spouse unless the minor children do not reside with the surviving spouse.  In such a case, the minor child’s share is paid to the person having custody of the minor child.  This claim is in addition to other benefits the surviving spouse may have under the Will, intestate succession or otherwise.
  • Exempt Property allows the surviving spouse, or if none the minor children, to receive up to $20,000 (in excess of loan balances) of household furniture, automobiles, furnishings, appliances, and personal effects. If the value of the exempt property is less than $20,000, the difference can be made up from other estate assets (i.e., cash).  Like the family allowance, the exempt property is in addition to other benefits the surviving spouse may have under the Will, intestate succession or otherwise.
  • Homestead Allowance allows the surviving spouse, or if none the minor children, to claim a homestead allowance up to $20,000. Caution should be used in filing a homestead allowance claim.  The homestead allowance is IN LIEU of other benefits the surviving spouse or minor children may be entitled to.  If the homestead allowance is made, the surviving spouse could waive their entitlements under the Will or intestate succession. 

The priority claims must be filed within one (1) year from the decedent’s death in the court administering the estate or by recording a written instrument with the clerk of court.  The surviving spouse, or guardian of the minor children, has the right to select the property used to satisfy these priority claims.  The personal representative may select the property only if the surviving spouse, or guardian, is unable to make the selection or fails to do so within a reasonable time. 

Assume husband died with a probate estate of $100,000.  The estate has administrative expenses of $2,000, funeral expenses of $4,000 and credit card debts of the decedent totaling $55,000.  If the surviving spouse paid all these expenses and debts without making the priority claims, the surviving spouse would receive $39,000 ($100,000 - $2,000 - $4,000 - $55,000).  If the surviving spouse filed for the family allowance and exempt property, she would receive $44,000 ($5,000 more) in priority claims and the credit card companies would receive $50,000 ($100,000 - $2,000 - $44,000 - $4,000).