When Payment Begins
The personal representative cannot start paying creditors the moment claims arrive. Arizona law requires waiting until the claim filing deadline has expired. Only then does the representative proceed to pay allowed claims, and even then, certain obligations come first.
On the expiration of the earlier of the time limitations prescribed in section 14-3803 for the presentation of claims, the personal representative shall proceed to pay the claims allowed against the estate in the order of priority prescribed, after making provision for allowance in lieu of homestead, exempt property and family allowance, for claims already presented which have not yet been allowed or whose allowance has been appealed, and for unbarred claims which may yet be presented, including costs and expenses of administration.
A.R.S. § 14-3807(A)Family protections take priority. The surviving spouse and dependent children are entitled to homestead allowance, exempt property, and family allowance before any creditor receives payment. The representative must also reserve funds for claims that are still being reviewed and for potential claims that have not yet been filed but are not yet barred.
Paying Claims Before the Deadline
A personal representative can pay a valid claim before the filing deadline expires, even without a formal presentation. But this flexibility comes with personal risk. If early payment leaves the estate unable to pay other creditors who filed on time, the personal representative may be personally liable for the shortfall.
The personal representative at any time may pay any just claim which has not been barred, with or without formal presentation, but the personal representative is personally liable to any other claimant whose claim is allowed and who is injured by such payment.
A.R.S. § 14-3807(B)This is why careful estate administration matters. A personal representative who pays claims out of order or too early risks being held responsible out of their own pocket. Working with an experienced probate attorney helps avoid these costly mistakes.