§ 1811 — Payment of debts and funeral expenses 1

§ 1811. Payment of debts and funeral expenses\n 1. The reasonable funeral expenses of the decedent subject to the\npayment of expenses of administration shall be preferred to all debts\nand claims against his estate and shall be paid out of the first moneys\nreceived by his fiduciary.\n 2. Every fiduciary must proceed with diligence to pay the debts of the\ndecedent according to the following order:\n (a) Debts entitled to a preference under the laws of the United States\nand the state of New York.\n (b) Taxes assessed on property of the deceased previous to his death.\nAny taxes so paid by a fiduciary on real property which descends to a\ndistributee or passes to a devisee shall be a charge thereon for which\nthe beneficiary must reimburse the estate unless in the case of wills\nthe testator has indicated expressly or by necessary implication that\nsuch taxes be otherwise paid.\n (c) Judgments docketed and decrees entered against the decedent\naccording to the priority thereof respectively.\n (d) All recognizances, bonds, sealed instruments, notes, bills and\nunliquidated demands and accounts.\n 3. Preference shall not be given in the payment of a debt over other\ndebts of the same class, except those specified in subparagraph (c) of\nsubdivision 2. A debt due and payable shall not be entitled to a\npreference over debts not due. The commencement of a suit for the\nrecovery of a debt or the obtaining of a judgment thereon against the\nfiduciary shall not entitle this debt to preference over others of the\nsame class. Debts not due may be paid according to the class to which\nthey belong, after deducting a rebate of legal interest on the sum paid\nfor the unexpired term of credit without interest. A debt or claim of\nthe fiduciary shall not have preference over others of the same class,\nexcept that if the claim of the fiduciary is secured by collateral the\nfiduciary may apply to the court for leave to surrender the collateral\nand make payment of the claim upon such conditions as directed by the\ncourt. Preference may be given to rents due or accruing on leases held\nby the decedent at the time of his death over other debts specified in\nsubdivision 2 (d) if it appears to the court's satisfaction that such\npreference will benefit the estate of the decedent.\n 4. Dividends payable to secured creditors in insolvent estates shall\nbe computed only upon the difference between the face amount of the\nclaim without security and the value of the security itself as of a date\nto be determined by the court for the fixation of the rights of\ncreditors, unless the creditor shall surrender his security to the\nfiduciary, in which event the dividend upon such claim when established\nas valid shall be computed on the full face amount thereof.\n