Wyoming Debt Payment Priority

When a Wyoming estate cannot pay everything it owes, W.S. 2-7-701 sets the order. The personal representative sorts every debt and charge into ten classes: court costs, other costs of administration, reasonable funeral and burial expenses, the family allowances, federal priority debts and taxes, last-illness medical bills, state priority taxes, 90 days of employee wages, public assistance repayment, and then everyone else. Under W.S. 2-7-702 each class is paid in full before the next one gets a dollar.

Wyoming's list has three features a template copied from another state tends to miss. Court costs sit in a class of their own, ahead of the rest of administration. The funeral bill is paid before the family allowances, and both come before the hospital. And a Medicaid claim lands in the last-illness class because its own statute puts it there. Wyoming is not a Uniform Probate Code state, so do not reorder this list to match one.

A note on the links. Wyoming publishes its statutes as one PDF per title, with no page for a single section, so every statute link below opens the Title 2 PDF from the Wyoming Legislature (or the Title 42 PDF for Medicaid). We read each section there on September 28, 2026. The edition was created May 8, 2026, after the 2026 budget session. Read this beside how claims are filed, which owns the notice, the three-month bar and the clerk's file, and Wyoming executor duties, which fits payment into the rest of the job. This is general information about Wyoming law rather than advice about one estate. An insolvent estate is where a licensed Wyoming attorney earns the fee, so talk to one before money goes out.

When the Order Starts to Matter

Look at the opening words of 2-7-701(a). The duty to classify applies "in any estate in which the assets are or appear to be insufficient to pay in full all debts and charges of the estate." The word "appear" matters. The duty can attach as soon as a large hospital bill, a tax notice, or a thin bank balance suggests a shortfall, which is generally before any claim is paid rather than after the money is gone.

When the estate can pay every allowed claim, the classes never collide, because everyone gets paid. They decide real outcomes in an estate that was always short, and in one that looked solvent until a late bill arrived.

W.S. 2-7-702 adds the rules inside the list. Payment follows the order "without preference of any claim over another of the same class." If the assets cannot pay a whole class, "the claims shall be paid on a pro rata basis without preference between claims then due and those of the same class not due." So a collector who calls every day gets no head start over a creditor who waits.

What Each Class Holds

Classes 1 and 2, court costs and administration. Wyoming splits these into two classes. The statute does not define court costs. The rest of administration is described in W.S. 2-7-802(a), which lets the personal representative incur and pay reasonable and necessary expenses of the estate, subject to approval at the final report and accounting. Its list includes appraisals, title and lien searches, sale costs such as broker's commissions and title insurance, insurance, repair and protection of estate property, tax return preparation, publications and mailings, and locating heirs. W.S. 2-7-509 adds that the costs of the homestead and exempt property proceedings are paid as expenses of administration.

Class 3, funeral and burial. Reasonable funeral and burial expenses. The word "reasonable" limits the class to a reasonable bill, not whatever was spent.

Class 4, the family allowances. This covers allowances under 2-7-503 and 2-7-504. Article 5 of chapter 7 gives the spouse or minor children a reasonable provision for their support under 2-7-501(a) and, where that is not enough, an allowance for the family's maintenance during settlement under 2-7-502. W.S. 2-7-503 says allowances "shall be paid in preference to all other charges except funeral expenses and cost of administration," which is exactly where class 4 sits. The court may make an allowance take effect from the date of death. Our guide to the family allowance covers how the court sets the amount.

Class 5, federal preferences. "All debts and taxes having preference under the laws of the United States." The federal priority statute, 31 U.S.C. 3713, is the one most estates meet, and it has its own section below.

Class 6, the last illness. Reasonable and necessary medical and hospital expenses of the last illness, "including compensation of persons attending him at his last illness." Hospital, doctor and caregiver bills from the final illness land here. Medical bills from years earlier do not; those fall to class 10.

Class 7, Wyoming taxes. Taxes with a preference under the laws of Wyoming.

Class 8, recent wages. Debts owed to employees "for labor performed during the ninety (90) days next preceding the death of the decedent." A ranch hand or household employee owed pay for the last three months lands here. Older wages fall to class 10.

Class 9, public assistance. Claims allowed under 2-7-707. That section says a claim for repayment of assistance under Wyoming's public welfare programs is paid "after the claims in W.S. 2-7-701 (a)(i) through (viii) are paid and satisfied." It also says no such claim "shall be enforced against any property of the estate that may be necessary for the support, maintenance or education of the decedent's surviving spouse, minor child or other dependent."

Class 10, everyone else. Credit cards, personal loans, older medical bills, and every other allowed unsecured claim.

Exempt Property and the Homestead Sit Outside the List

Some property never reaches the creditors at all. When a Wyoming resident dies leaving a spouse or minor children, W.S. 2-7-504 has the court set over to the spouse, or if none to the minor children, "all property of the decedent exempt from execution under the exemption laws of this state including the homestead." That property "shall not be subject to the payment of debts of the decedent, except expenses of administration or funeral expenses of the decedent in cases in which there is not other property in the estate sufficient to pay the expenses."

The homestead has a figure of its own. W.S. 2-7-508 says that wherever the Probate Code sets or refers to the limit of the homestead exemption, "the exemption is thirty thousand dollars ($30,000.00)." Keep that separate from the larger homestead figure in the execution exemption statute in Title 1, which does not govern the probate homestead. Our guide to Wyoming exempt property and the probate homestead walks through both.

Three more rules finish the picture:

• No spouse and no minor children. W.S. 2-7-501(b) says that "if there is neither spouse nor minor children the homestead is liable for the debts of the decedent."
• A buyer of the homestead. W.S. 2-7-509 says a person who succeeds to a homestead by purchase or otherwise takes it "exempt from claims against the estate of the decedent."
• A mortgage on the homestead. Under W.S. 2-7-506, if the estate can pay all claims, the liens on the homestead are paid out of estate funds. If it cannot, "liens or encumbrances shall be paid proportionately with other claims allowed," and the lien is enforced against the homestead only for the deficiency left after that payment.

If the whole estate turns out to be exempt and is set over to the family, W.S. 2-7-505 says no further administration is required unless more property turns up. That is the fastest end to a short estate in Wyoming.

Where Wyoming Medicaid Fits

The Medicaid recovery statute answers the rank question in its own words. W.S. 42-4-206(b): "The claim shall be considered an expense of the last illness of the decedent." That is the language of class 6. The rest of the section shapes the claim:

• The Department of Health files a claim for medical assistance given when the person was 55 or older, or while the person was an inpatient in a nursing facility or a similar medical care facility, under 42-4-206(a).
• No statute of limitations limits the department's recovery, under 42-4-206(b), and the claim "shall not include interest," under 42-4-206(c).
• No claim is filed when the decedent leaves a child under 21, or a child who is blind or permanently and totally disabled, under 42-4-206(d).
• The department must waive the claim where recovery "would work an undue hardship," under 42-4-206(f).
• For this section, "estate" reaches beyond probate to assets that passed by joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement, under 42-4-206(g)(ii).

So a Medicaid claim and a last-illness hospital bill stand in the same class and share pro rata when class 6 runs short. Class 9, by contrast, covers repayment of other public welfare assistance under 2-7-707. If the estate is short and it is unclear which rule governs a particular state claim, that is a question for a licensed Wyoming attorney.

Secured Debts and Judgments

A lender with collateral does not simply wait in class 10. W.S. 2-7-503 says the allowance rules shall not "invalidate any mortgage or lien of record against decedent's property," and W.S. 2-7-616 lets the court, with the mortgagee's consent, order property sold subject to the mortgage, and "the consent shall release the estate should a deficiency later appear." The homestead lien rule in 2-7-506, above, shows the same idea: the lien follows the property, and only the shortfall competes with the other claims.

A money judgment against the decedent is not a shortcut either. Under W.S. 2-7-710, no execution issues on a judgment after death unless it is for the recovery of property or the enforcement of a lien, and a judgment for money "shall be filed with the clerk like any other claim."

Timing: Allow, Rank, Then Pay

Only a claim filed in time enters the order. See the three-month claim bar for the notice, the filing with the clerk, and the exceptions. After that:

1. Allow or reject. Under W.S. 2-7-712(a), the personal representative allows or rejects each filed claim in writing and files the decision with the clerk within 30 days after the time for filing claims expires.
2. Rank. W.S. 2-7-712(c) says every allowed claim "shall be ranked among the acknowledged debts of the estate to be paid in due course of administration." That ranking is the 2-7-701 list.
3. Pay in order. Payment runs class by class, and a class that runs short is split pro rata.

Three tools help a personal representative avoid paying the wrong person:

• Small bills. W.S. 2-7-703(d) lets the personal representative allow a claim of $200 or less without a filing, but the personal representative stays answerable at the hearing on the final report and accounting for whether that payment was proper.
• Claims not yet due. Under W.S. 2-7-705(a), a future, contingent or unliquidated claim that becomes due or certain before distribution is paid like a present claim of the same class. Otherwise 2-7-705(b) allows payment of an agreed present value with the claimant's consent, or a trust, mortgage, or bond to cover the future payment.
• A ruling in advance. W.S. 2-7-715 lets the personal representative ask the court, at any time, for an adjudication binding on all distributees as to the propriety of the personal representative's past or proposed allowance or rejection of claims. After a hearing on at least 20 days' certified mail notice to each distributee, the ruling binds every distributee served and cannot be questioned at the hearing on the final report.

If the personal representative is also a creditor, W.S. 2-7-708 has the court appoint a temporary administrator to decide whether to allow that claim. And the family does not get paid first: under W.S. 2-7-807(c), a partial distribution before final settlement comes only from property "over and above the amount necessary to pay the costs of administration and all just claims and taxes of the estate," and the court may make each distributee post a bond for a share of the debts. For where these dates fall, see the Wyoming probate timeline.

A Federal Claim Carries Its Own Priority Rule

Class 5 points outside the Wyoming 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 personal liability rule on federal terms, and Wyoming's list does not override it. If a short estate owes the IRS or another federal agency, sort out how Section 3713 and 2-7-701 interact with a Wyoming attorney before any money moves.

Two Worked Examples

An estate where the funeral beats the hospital. A Wyoming resident dies leaving a surviving spouse. After the court sets the exempt property over to the spouse, $40,000 remains. The claims are $300 of court costs, $6,000 of other administration costs, a $9,000 funeral bill, a $6,000 family allowance the court ordered, $4,000 of unpaid federal income tax, a $20,000 hospital bill from the last illness, and $10,000 on credit cards.

Class 1 takes $300, leaving $39,700. Class 2 takes $6,000, leaving $33,700. Class 3 takes $9,000, leaving $24,700. Class 4 takes $6,000, leaving $18,700. Class 5 takes $4,000, leaving $14,700. Class 6 holds $20,000 of claims and gets $14,700. The credit cards get nothing. In a state that ranked the funeral and the hospital together, the funeral home would have taken a share. In Wyoming it is paid in full.

The same estate with a Medicaid claim. Change one fact. The last-illness claims are a $12,000 hospital bill and an $8,000 Medicaid claim. Under 42-4-206(b) the Medicaid claim is an expense of the last illness, so class 6 still holds $20,000 and still gets $14,700. Under 2-7-702 the two share it pro rata: the hospital receives $8,820 and the Department of Health receives $5,880.

Abatement Is a Separate List

Creditors and heirs run on different rules. W.S. 2-7-701 ranks claims. W.S. 2-7-808 decides whose inheritance shrinks to pay them, "without any preference or priority as between real and personal property," in this order, unless the will says otherwise:

1. property not disposed of by the will
2. property devised to the residuary devisee, except property devised to a surviving spouse who takes under the will
3. other property the will gives away that is neither a specific gift nor part of the residue, with the same spouse exception
4. specific gifts of named property, with the same spouse exception
5. property devised to a surviving spouse who takes under the will

If that order would defeat the will's plan or the purpose of a devise, 2-7-808(b) lets the shares abate as needed to carry out the testator's intent.

Taxes Before the Final Decree

Class 7 is not the only place taxes matter. Under W.S. 2-7-812(a), before a final decree of distribution the court must be satisfied, by receipts, cancelled checks, closing letters or other proof, that all federal, state, county and municipal taxes levied on the estate property or due because of the death have been paid. The court will not discharge the personal representative or release the bond until then.

When to Call a Wyoming Attorney

Talk to a licensed Wyoming attorney when:

• the claims exceed the assets, so 2-7-701 decides who goes unpaid
• the estate owes the IRS or another federal agency, because 31 U.S.C. 3713 adds its own priority and personal liability
• the decedent received Medicaid or other public assistance, and the rank of the state's claim matters
• a bill might or might not belong to the last illness
• a secured creditor and the estate disagree about the collateral or a deficiency
• you already paid a lower class and now suspect a higher class will go short

You can find the district court that handles probate for each county on the Wyoming courts page.

Frequently Asked Questions

What order does Wyoming pay estate debts in?

When the assets are or appear to be insufficient to pay every debt and charge in full, W.S. 2-7-701(a) has the personal representative sort them into ten classes: court costs; other costs of administration; reasonable funeral and burial expenses; allowances under 2-7-503 and 2-7-504; debts and taxes with a preference under federal law; reasonable and necessary medical and hospital expenses of the last illness; taxes with a preference under Wyoming law; debts owed to employees for labor in the 90 days before death; claims allowed under 2-7-707 for repayment of public assistance; and all other allowed claims.

What happens when an estate cannot pay a whole class in Wyoming?

The class shares what is left in proportion. W.S. 2-7-702 pays each class in order without preference of one claim over another in the same class. If the assets cannot pay a class in full, its claims are paid pro rata, with no preference between claims already due and claims of the same class not yet due. Every class below it gets nothing.

Are funeral expenses paid before medical bills in Wyoming?

Yes. Reasonable funeral and burial expenses are class 3 under W.S. 2-7-701(a)(iii). Medical and hospital expenses of the last illness are class 6 under 2-7-701(a)(vi), behind the family allowances and federal priority debts. So on a short estate the funeral home is paid in full before the hospital sees anything.

Do family allowances come before creditors in Wyoming?

Ahead of most of them. W.S. 2-7-503 says allowances are paid in preference to all other charges except funeral expenses and the cost of administration, and 2-7-701(a)(iv) places allowances under 2-7-503 and 2-7-504 fourth, after court costs, other administration costs, and funeral and burial expenses. Property set over to the spouse or minor children under 2-7-504 is not subject to the decedent's debts at all, except administration or funeral expenses when no other property can pay them.

Where does a Wyoming Medicaid claim rank?

W.S. 42-4-206(b) says the Department of Health's claim shall be considered an expense of the last illness of the decedent, which is the wording of class 6 in 2-7-701(a)(vi). No statute of limitations applies to it and it carries no interest. The department files no claim if the decedent leaves a child under 21 or a child who is blind or permanently and totally disabled, under 42-4-206(d).

Is the Wyoming probate homestead safe from creditors?

Mostly. When the decedent leaves a spouse or minor children, W.S. 2-7-504 sets the exempt property, homestead included, over to them free of the decedent's debts except administration and funeral expenses when no other property can pay those. W.S. 2-7-508 caps the probate homestead at $30,000. With neither a spouse nor minor children, 2-7-501(b) makes the homestead liable for the debts.

Does a federal debt jump the Wyoming list?

Federal law gets class 5 under W.S. 2-7-701(a)(v), and it carries its own rule. Under 31 U.S.C. 3713(a)(1)(B) a claim of the United States shall be paid first when a deceased debtor's estate is not enough to pay all debts, and 3713(b) makes a representative who pays another debt first personally liable to the extent of that payment for the unpaid federal claim. Sort out a federal debt with a Wyoming attorney before paying anyone.

Related Guides

• Wyoming Creditor Claims in Probate
• Wyoming Executor Duties
• Wyoming Family Allowance
• Wyoming Exempt Property and Probate Homestead
• Wyoming Probate Timeline
• Wyoming Small Estate Affidavit Guide
• Wyoming Probate Guide

Sources:

• Title: W.S. 2-7-701, Debts and charges; classification. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-702, Debts and charges; order of payment. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-501, Right to homestead and support; "homestead" defined. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-502, Extra allowance for maintenance of family. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-503, Preference and payment of allowances; exceptions. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-504, Absolute property of surviving spouse and minor children; exceptions; renouncement of will of no effect. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-505, Procedure for setting off exempt property. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-506, Homestead to be set apart by court; payment of liens or encumbrances. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-508, Amount of homestead exemption. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-509, Costs of proceedings; homestead exempt from claims against estate. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-616, Sale subject to mortgage. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-703, Filing required; failure to do so constitutes bar; exceptions. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-705, Future, contingent and unliquidated claims. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-707, Repayment of public assistance. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-708, Personal claims of personal representatives. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-710, Judgments rendered against decedent before death; execution thereon limited. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-712, Allowance and rejection of claims. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-715, Adjudication of propriety in handling claims prior to final report. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-802, Expenses of administration; standard; how paid. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-807, Distribution before final settlement; notice; hearing; costs. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-808, Order of abatement. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 2-7-812, Payment of all taxes prerequisite; filing of documents. Publisher: Wyoming State Legislature, Wyoming Statutes Title 2. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title02.pdf
• Title: W.S. 42-4-206, Claims against estates. Publisher: Wyoming State Legislature, Wyoming Statutes Title 42. Publication Date: Not listed (title PDF created 2026-05-08), accessed 2026-09-28. URL: https://wyoleg.gov/statutes/compress/title42.pdf
• Title: 31 U.S.C. 3713, Priority of Government claims. Publisher: Office of the Law Revision Counsel, United States House of Representatives. Publication Date: Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 972, accessed 2026-09-28. URL: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3713&num=0&edition=prelim

It is not legal advice.