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North Dakota Debt Payment Priority
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North Dakota Debt Payment Priority

NDCC 30.1-19-05 pays administration costs, the funeral, federal-preference debts, last-illness bills, then unpaid child support, then everyone else.

By Settled Editorial

When a North Dakota estate cannot pay everything it owes, NDCC 30.1-19-05(1) decides who gets paid. The order is costs and expenses of administration, then reasonable funeral expenses, then debts and taxes that federal law prefers, then last-illness medical and hospital bills, then the decedent's child support that was due and unpaid before death, then debts and taxes that other North Dakota law prefers, then everyone else.

Three features make North Dakota's list its own. The funeral has a class to itself, ahead of the hospital. Federal-preference debts, such as a federal tax balance, rank ahead of the last-illness bills. And past-due child support has its own class. A template copied from a neighboring state gets at least one of those wrong, and on a short estate that changes who goes unpaid.

Every rule below was read on September 28, 2026 in the chapter PDFs of the North Dakota Century Code at ndlegis.gov, the Legislative Council's host, which states that all statutory changes approved by the 69th Legislative Assembly in 2025 are reflected. Read this page beside how creditors present claims, which owns the notice and the deadlines, and the personal representative's duties, which puts payment in order with the rest of the job. This is general information about North Dakota law rather than advice about one estate. An insolvent estate is where a licensed North Dakota attorney earns the fee, so talk to one before any money goes out.

ClassWhat it coversStatute
aCosts and expenses of administration30.1-19-05(1)(a)
bReasonable funeral expenses30.1-19-05(1)(b)
cDebts and taxes with preference under federal law30.1-19-05(1)(c)
dReasonable and necessary medical and hospital expenses of the last illness, including compensation of persons attending the decedent30.1-19-05(1)(d)
eThe decedent's child support obligations that were due and unpaid before death30.1-19-05(1)(e)
fDebts and taxes with preference under other laws of North Dakota30.1-19-05(1)(f)
gAll other claims30.1-19-05(1)(g)

The Order Only Matters When the Money Runs Short

Start with the opening words of the section: "If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order." When the estate can pay every allowed claim, the classes never collide, because everyone gets paid.

They decide real outcomes in two situations. The first is an estate that was always insolvent, where the claims exceed the assets and somebody goes unpaid. The second is an estate that looked solvent and then stopped being solvent: a hospital bill that shows up late, or a tax bill that lands after the family has been paid. That second case is where NDCC 30.1-19-07(2) turns a creditor's loss into the personal representative's personal problem.

NDCC 30.1-19-05(2) adds two rules inside the list. "No preference shall be given in the payment of any claim over any other claim of the same class," so a class the estate cannot cover in full is split in proportion to each claim. And "a claim due and payable shall not be entitled to a preference over claims not due." The bill with the loudest collector gets no head start.

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What Each Class Holds

Class (a), administration. The statute does not list what counts, but the costs of running the estate belong here, such as the court filing fee, the cost of publishing the notice to creditors if the personal representative chooses to publish, and the fees of the personal representative and the attorney.

Class (b), the funeral. Reasonable funeral expenses stand alone in North Dakota. When the estate cannot pay everyone, the funeral class is satisfied before any money reaches the last-illness class. The statute says "reasonable," so the class covers a reasonable funeral bill rather than whatever was spent.

Class (c), federal-preference debts and taxes. Debts and taxes that federal law gives a preference. The federal priority statute is the one most estates meet, and it has its own section below. Placing this class above the last illness is a North Dakota choice: a federal tax balance ranks ahead of the hospital.

Class (d), the last illness. Reasonable and necessary medical and hospital expenses of the decedent's last illness, "including compensation of persons attending the decedent." Care from years earlier is not the last illness, and those bills fall to class (g).

Class (e), child support. "The decedent's child support obligations that were due and unpaid before death." By its words the class covers support that was already due and still unpaid when the decedent died. Whether a later installment or another support claim belongs somewhere else is a question for a North Dakota attorney.

Class (f), state-preference debts and taxes. Debts and taxes that another North Dakota statute prefers. The Medicaid recovery claim, covered below, is one statute that calls its claim "preferred."

Class (g), everyone else. Credit cards, personal loans, medical bills from before the last illness, and unsecured debts of every other kind.

Allowances Come Off the Top Before Class (a)

The seven classes are not the first call on a North Dakota estate. NDCC 30.1-19-07(1) tells the personal representative to pay allowed claims in the order of priority "after making provision for homestead, family, and support allowances," for claims presented but not yet allowed or under appeal, and for unbarred claims that may still come in, including costs and expenses of administration. Read more on exempt property and the homestead and on the North Dakota family allowance.

  • Family allowance, NDCC 30.1-07-02. A reasonable allowance in money for the surviving spouse and the minor children the decedent was obligated to support and children the decedent was in fact supporting, for the period of administration. It "may not continue for longer than one year if the estate is inadequate to discharge allowed claims," and it "is exempt from and has priority over all claims except the homestead allowance." Under NDCC 30.1-07-03(1), the personal representative may set it at a lump sum up to $27,000 or installments up to $2,250 a month for one year. A different amount takes a petition to the court.
  • Exempt property, NDCC 30.1-07-01. "In addition to the homestead defined in section 47-18-01," the surviving spouse takes up to $15,000 in value, above any security interests, in household furniture, automobiles, furnishings, appliances, and personal effects. With no surviving spouse, the minor children the decedent was obligated to support and children the decedent was in fact supporting take it jointly. Rights to exempt property "have priority over all claims against the estate." When there is not $15,000 of those items, the spouse or children can take other assets to make up the gap, but that make-up right "abates as necessary to permit earlier payment of the homestead allowance and family allowance."

Both sections still use the uniform code's phrase "homestead allowance," but chapter 30.1-07 holds no section that sets a dollar homestead allowance. North Dakota protects the family home through the homestead instead, which the next section covers. Do not carry a cash homestead allowance figure over from another state.

NDCC 30.1-07-03(1) adds one limit: if the estate is otherwise sufficient, property left by specific devise in the will may not be used to satisfy rights to exempt property.

The Homestead Stays Out of the Line

The house works differently. NDCC 30-16-03 says the homestead "shall not be subject to the payment of any debt or liability" existing against the decedent at death, "other than the liabilities set forth in section 47-18-04, and except as otherwise provided in section 30-16-04."

Here is what those two sections let reach it:

  • NDCC 47-18-04 lists mechanics', construction, and laborers' liens for improving the homestead; a mortgage on it signed and acknowledged by both spouses, or by an unmarried owner; debts for its purchase and taxes levied on it; and all other debts, but only against value above $150,000 over liens and encumbrances, as shown by an appraisal.
  • NDCC 30-16-04 adds claims for county general assistance, Department of Health and Human Services general assistance, and state claims for repayment of old-age assistance and aid to the permanently and totally disabled. It also says the homestead may not pass to anyone other than the surviving spouse and the decedent's heirs in the direct descending line "until all the decedent's debts are fully paid."
  • NDCC 30-16-09 lets the court make any value above the legal limit available for debts, "after all of the other available property has been exhausted."

Under these sections, an unsecured credit card debt generally does not reach a homestead worth less than $150,000 over its liens. How the homestead rules apply to a Medicaid recovery claim is not answered in these sections, and it is a question for a licensed North Dakota attorney when the home is the main asset and the decedent received Medicaid.

Where North Dakota Medicaid Fits

NDCC 30.1-19-05 does not name Medicaid in any class. The recovery statute, NDCC 50-24.1-07, writes its own order instead. Here is what it says.

  • On the death of a recipient who was 55 or older when the assistance was paid, or who lived in a nursing facility or a similar care setting and was not reasonably expected to be discharged and return home, the medical assistance paid "must be allowed as a preferred claim against the decedent's estate," under 50-24.1-07(1). The same subsection reaches the estate of the recipient's spouse at the spouse's death.
  • That claim is paid after, in this order: (a) the recipient's own share of nursing home or similar care costs for the month of death; (b) funeral expenses "not in excess of three thousand five hundred dollars"; (c) expenses of the last illness, other than those paid by medical assistance; (d) expenses of administering the estate, including attorney's fees approved by the court; and (e) through (i), claims under chapters 50-01, 50-24.5, 50-06.3 (and on behalf of the state hospital) and 54-68, and claims under subsection 4.
  • Under 50-24.1-07(2)(a), the claim may not be required to be paid, and no interest accrues, during the surviving spouse's lifetime or while a child under 21, or a blind or permanently and totally disabled child, survives. The same sentence says no timely filed claim may be disallowed because of that rule.
  • Under 50-24.1-07(3), every personal representative, on the grant of letters, "shall forward to the department a copy of the petition or application commencing probate," with the names of the legatees, devisees, surviving joint tenants, and heirs.

Two lists now apply to the same estate, and they do not match. The Medicaid list caps the funeral at $3,500 and puts the funeral ahead of administration, while 30.1-19-05 has no dollar cap and puts administration first. Neither section cross-references the other. When an estate that owes the department cannot pay everyone, the ranking between the two lists is a question for a licensed North Dakota attorney, and it bears on any funeral bill above $3,500 and on every lower class. The department's Estate Recovery page lists the Estate Recovery Unit's contact details.

Secured Debts Are Settled Outside the Seven Classes

A lender holding collateral does not stand in line with the credit card companies. NDCC 30.1-19-03(3)(a) says nothing in the claim deadlines affects "any proceeding to enforce any mortgage, pledge, or other lien upon property of the estate."

NDCC 30.1-19-09 does the arithmetic. If the creditor surrenders its security, it is paid on the full allowed claim. If it exhausts the security first, it is paid on the allowed claim less the fair value of the security. If it has no right to exhaust the security or has not done so, it is paid on the allowed claim less the value of the security, set by the security agreement or by agreement, arbitration, compromise, or litigation with the personal representative. Only that shortfall enters the seven classes, and it lands in class (g) unless some other rule moves it.

Claims Not Yet Due, and Interest

NDCC 30.1-19-10 handles the claim nobody can price yet. If a future, contingent, or unliquidated claim becomes due or certain before distribution and has been allowed or established, it is paid like a present claim of the same class. Otherwise the personal representative, or the court on petition, may pay the claimant the present or agreed value with the claimant's consent, or arrange future payment through a trust, a mortgage, or a bond or security from a distributee.

Interest runs too. Under NDCC 30.1-19-06(5), an allowed claim bears interest at the legal rate starting 60 days after the time for original presentation has expired, unless a contract sets its own interest. A slow administration of a short estate grows the claims it cannot pay.

Timing, and the Liability for Paying Early

NDCC 30.1-19-07(1) sets the moment. "Upon the expiration of three months from the date of the first publication and mailing of the notice to creditors," the personal representative pays the allowed claims in the order of priority, after the provisions described above. A claimant whose allowed claim goes unpaid can petition the court for an order directing payment to the extent estate funds are available.

Publishing is optional in North Dakota. Under NDCC 30.1-19-03(1)(b), claims that arose before the death stay open for three years after the death if notice was never published and mailed. So a personal representative who skips notice pays in a window that never closes on its own. The North Dakota creditor claims guide sets out both deadlines, and the North Dakota probate timeline shows where they fall.

NDCC 30.1-19-07(2) is the trap. The personal representative "at any time may pay any just claim which has not been barred," and is then personally liable to any other allowed claimant injured by that payment if:

  1. the payment went out before the three-month period ended and the personal representative did not require the payee to give adequate security for a refund, or
  2. the payment, through the personal representative's negligence or willful fault, deprived the injured claimant of its priority.

Put that beside 30.1-19-05(2). Paying a class (g) credit card in month two because the collector kept calling, and then finding the class (d) hospital bill cannot be paid, is the shape of a claim under 30.1-19-07(2)(b). Two facts decide the exposure: the class of every claim on the table, and whether the claim period has run.

A Federal Claim Carries Its Own Priority Rule

Class (c) points outside the North Dakota code. Under 31 U.S.C. 3713(a)(1)(B), a claim of the United States Government "shall be paid first" when the estate of a deceased debtor, in the custody of the executor or administrator, "is not enough to pay all debts of the debtor." Section 3713(b) then makes a representative who pays any part of another debt before paying a Government claim "liable to the extent of the payment for unpaid claims of the Government."

That is a second personal liability rule, on federal terms, for the same person 30.1-19-07(2) already binds. The federal statute says "first," while 30.1-19-05 puts administration and the funeral ahead of class (c). When an estate that cannot pay everything owes the IRS or another federal agency, how Section 3713 and the North Dakota list interact is a question for a licensed North Dakota attorney, and the answer bears on the order of every payment.

When the Allowances and the Top Classes Take Everything

North Dakota gives a short exit for the estate the allowances and the top classes will use up anyway. Under NDCC 30.1-23-03, if the inventory and appraisal show that the value of the entire estate, less liens and encumbrances, does not exceed "the homestead as defined in section 47-18-01, plus exempt property pursuant to section 30.1-07-01, family allowance, costs and expenses of administration, reasonable funeral expenses, and reasonable and necessary medical and hospital expenses of the last illness," the personal representative, "without giving notice to creditors, may immediately disburse and distribute the estate" and file a closing statement under 30.1-23-04.

Look at that list. It is the homestead, the two allowances, and classes (a), (b), and (d) of 30.1-19-05. The homestead counts on the allowance side, so a family home can carry an estate under the test. The North Dakota small estate guide covers this route beside the affidavit.

Two Worked Examples

An estate the allowances use up. A North Dakota resident dies leaving a surviving spouse, $45,000 in a bank account, a rented apartment, and no household goods worth counting. The claims are $4,000 of administration costs, a $9,000 funeral bill, a $25,000 hospital bill from the last illness, and $20,000 of credit card balances.

The allowances go first. The personal representative may set a family allowance of up to $27,000 without a court order, which leaves $18,000. The spouse's $15,000 exempt property right has no household goods to attach to, so it runs against other assets and takes $15,000, leaving $3,000. Class (a) takes that $3,000. Nothing reaches the funeral home, the hospital, or the card issuers. And because $45,000 is less than exempt property plus the family allowance, administration, the funeral, and the last illness, 30.1-23-03 lets the personal representative distribute without giving notice to creditors.

An estate where the classes decide. Change the facts. After the allowances, $30,000 is left. The claims are $5,000 of administration costs, a $9,000 funeral bill, a $2,000 federal income tax balance, a $15,000 hospital bill and a $5,000 hospice bill from the last illness, $6,000 of child support that was due and unpaid before the death, and $12,000 of credit cards.

Class (a) takes $5,000, leaving $25,000. Class (b) takes the full $9,000 funeral bill, leaving $16,000. Class (c) takes the $2,000 federal balance, leaving $14,000. Class (d) holds $20,000 of claims, so it cannot be paid in full. Under 30.1-19-05(2) the hospital and the hospice split the $14,000 in proportion, 70 cents on the dollar: the hospital gets $10,500 and the hospice gets $3,500. The money is gone before class (e), so the child support and the credit cards get nothing. In a state that puts the funeral and the last illness in one class, the funeral home would have taken a share. In North Dakota it is paid in full, and the federal tax is paid ahead of the hospital.

Abatement Is a Separate List

Creditors and heirs run on different rules. NDCC 30.1-19-05 ranks claims. NDCC 30.1-20-02 ranks the shares of the people who inherit, and abates them "without any preference or priority as between real and personal property" in this order: property not disposed of by the will, residuary devises, general devises, then specific devises. Within each group, abatement is in proportion. If the will sets its own order, or the listed order would defeat the plan, 30.1-20-02(2) lets the shares abate as needed to carry out the testator's intent.

What Survives Distribution

Closing the estate does not end every exposure.

  • NDCC 30.1-21-04 lets an undischarged claim that is not barred be pursued against distributees after distribution. No distributee is liable for amounts received as exempt property or homestead or family allowances, or for more than the value of the distribution when made. Between distributees, each bears the cost as if the claim had been paid during administration, and one who fails to tell the others about a demand in time loses the right of contribution.
  • NDCC 30.1-21-06 bars a claimant's claim against a distributee at the later of three years after the death or one year after the distribution, except for fraud.
  • NDCC 30.1-21-05 bars claims by successors and creditors against the personal representative for breach of fiduciary duty unless a proceeding starts within six months after the closing statement is filed. Fraud, misrepresentation, and inadequate disclosure about settling the estate stay outside that bar.
  • NDCC 30.1-32.1-12 lets the estate reach property passed by a transfer on death deed to the extent the probate estate cannot pay allowed claims or statutory allowances to a spouse or child. The proceeding must start within 18 months after the death.

When to Call a North Dakota Attorney

Talk to a licensed North Dakota attorney when:

  • the claims exceed the assets, so 30.1-19-05 decides who goes unpaid
  • a federal tax or other federal debt is in the mix, because 31 U.S.C. 3713 adds its own priority and its own personal liability
  • the decedent received Medicaid, because 50-24.1-07 sets a separate order with a $3,500 funeral cap
  • the home is the main asset and a creditor claims it falls under 47-18-04 or 30-16-04
  • a class boundary is arguable, such as whether a bill belongs to the last illness or to care years earlier
  • you already paid a claim and now suspect a higher class will go short

You can find the clerk of district court for each county on the North Dakota probate courts page.

Frequently Asked Questions

What order does North Dakota pay estate debts in?

NDCC 30.1-19-05(1) sets seven classes for an estate that cannot pay every claim in full: costs and expenses of administration; reasonable funeral expenses; debts and taxes with preference under federal law; reasonable and necessary medical and hospital expenses of the last illness, including compensation of persons attending the decedent; the decedent's child support obligations that were due and unpaid before death; debts and taxes with preference under other laws of North Dakota; and all other claims. Under 30.1-19-05(2) no claim is preferred over another in the same class, and a claim due and payable gets no preference over claims not due.

Are funeral expenses paid before medical bills in North Dakota?

Yes. North Dakota gives reasonable funeral expenses a class of their own, class (b) of NDCC 30.1-19-05(1), right after administration costs. Medical and hospital expenses of the last illness sit in class (d), behind the funeral and behind debts and taxes that federal law prefers. So on a short estate the funeral home is paid in full before the hospital sees anything.

Does unpaid child support get priority in a North Dakota estate?

Yes. NDCC 30.1-19-05(1)(e) makes the decedent's child support obligations that were due and unpaid before death the fifth class. It ranks behind administration costs, the funeral, federal-preference debts and taxes, and last-illness expenses, and ahead of state-preference debts and all general creditors. The statute's words cover support that was already due and unpaid at the death.

Do the family allowance and exempt property come before creditors in North Dakota?

Yes. NDCC 30.1-07-02(1) says the family allowance is exempt from and has priority over all claims except the homestead allowance, and NDCC 30.1-07-01 gives the $15,000 exempt property right priority over all claims against the estate. NDCC 30.1-19-07(1) tells the personal representative to pay claims in order only after making provision for homestead, family, and support allowances. The personal representative may set the family allowance at a lump sum up to $27,000 or up to $2,250 a month for one year under 30.1-07-03(1).

Can creditors take the house in a North Dakota estate?

Usually not. NDCC 30-16-03 says the homestead is not subject to the decedent's debts other than the liabilities in 47-18-04 and as provided in 30-16-04. Those are mechanics' and laborers' liens for improving it, a mortgage signed by both spouses or an unmarried owner, purchase debts and taxes on it, and value above $150,000 over liens. Section 30-16-04 adds claims for county and state general assistance and certain state assistance repayments.

Where does a North Dakota Medicaid claim rank?

NDCC 50-24.1-07(1) makes the medical assistance paid after a recipient turned 55, or after a permanent institutionalization, a preferred claim against the estate, paid after, in order, the recipient liability for the month of death, funeral expenses not over $3,500, last-illness expenses, administration expenses including court-approved attorney's fees, and claims under chapters 50-01, 50-24.5, 50-06.3 and 54-68 and subsection 4. Under 50-24.1-07(2)(a) the claim cannot be required to be paid, and interest cannot accrue, while a surviving spouse lives or a child under 21, or a blind or permanently and totally disabled child, survives.

Can a North Dakota personal representative be personally liable for paying in the wrong order?

Yes. NDCC 30.1-19-07(2) lets the personal representative pay any just claim that has not been barred at any time, then makes the personal representative personally liable to another allowed claimant injured by the payment in two cases: the payment went out before the three-month period after first publication and mailing ended without adequate security for a refund, or the payment deprived the injured claimant of priority through the personal representative's negligence or willful fault.

Related Guides

Sources:

It is not legal advice.

Information current as of September 28, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in North Dakota can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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