Claims In Probate III — Marital And Family Rights
Spouses, ex-spouses, and children of divorced parents present peculiar problems when Estates are not able to pay all of their bills. Those claims usually fall into one of three classes.
First Class Claims
To the extent the spouse pays funeral or related expenses or expenses of administration, he or she is entitled to reimbursement of those payments as a First Class Claim. An issue sometimes arises as to whether certain expenses are properly “administrative expenses,” e.g., payments to maintain the Decedent’s real estate where the spouse continues to reside there. Otherwise, this category does not usually cause disputes regarding marital and family rights.
Second Class Claims
Second Class Claims are the Surviving Spouse Award and Dependent Child’s Award. The minimum award to a spouse is $20,000.00. The minimum award is $10,000.00 per child for each dependent (not necessarily “minor”) child of the Decedent (plus $20,000.00 for all children combined if there is no surviving spouse). The goal of both awards is to provide support for a period of nine months after the death of the decedent in a manner suited to the condition and life of the surviving spouse and/or child and to the condition of the estate. Minimum awards can be paid without authorization by the Court. If any amounts are sought beyond the minimums, it may be necessary to give notice to parties whose interest in the estate will be affected and to obtain an award from the Court.
Note that these awards have priority over even debts due to the Federal government and that they are exempt from the claims of creditors. Remaining marital and family rights are not so favored.
Marital Rights After Divorce
A Settlement Agreement or Judgment of Dissolution of Marriage may contain terms or conditions that have not been fully completed or complied with prior to the death of the Decedent. Under 750 ILCS 5/510(d) and (e), the death of the obligor parent does not necessarily terminate obligations of the deceased parent under the divorce judgment or agreement or by law. Those obligations specifically include child support and educational expenses and can be brought as claims in the Probate proceeding. Other obligations arising out of divorce can also be raised in the Probate proceeding as “contract” claims, such as obligations to maintain life insurance coverage or to convey property.
Seventh Class Claims
A claim of an ex-spouse for anything other than a First or Second Class Claim is a Seventh Class Claim. Those include claims for child support, educational expenses, and maintenance. Similarly, if a Decedent died with substantial unpaid medical bills for which a surviving spouse is liable under the Family Expense Act, any claims by the surviving spouse (as well as those bills themselves) are only Seventh Class Claims. Those claims are thus on a par with all other non-priority claims against the Estate, such as charge account balances, magazine and newspaper subscriptions, rent and utilities, business debts, and so on. Where there are large unpaid bills and where the Estate is insufficient to pay all of the claims in full, this situation can work a hardship on the spouse or ex-spouse. Apart from the Surviving Spouse Award and the Dependent Child’s Award, current law does not give the family any other priority over other Seventh Class Claimants.
- Have your client (spouse or guardian for dependent children) keep track of actual living expenses for nine months following the date of death. If the actual expenses are greater than the minimum Surviving Spouse Award or Dependent Child’s Award, you can petition the Court accordingly with the proof in hand to substantiate the claim. It is better to have a Second Class Claim than a Seventh Class Claim.
- Maximize Claims wherever possible. Claims for future child support payments and future educational expenses due from the deceased parent coupled with increases for expected inflation can come to a substantial amount. If Seventh Class Claims are paid pro-rata, the greater the amount of the client’s claim, the greater the amount that will actually be paid to the client.
- Where possible, insulate obligations under divorce judgments against the death of the obligor parent, e.g., by making the obligations direct liens against assets. That way, those obligations come before any claims, and there is no risk (other than inadequate security) that the obligations will not be paid because of a shortfall in the obligor’s Estate.
In general, Illinois and Federal Law go to great lengths to protect the rights of divorced spouses and the children of divorce. Most marital obligations are not dischargeable in Bankruptcy. Child support is withheld directly from wages to the potential detriment of other creditors. Child support obligations become judgments when not paid. There are many similar protections. HOWEVER, child support, educational expenses, medical expenses, maintenance, and all other similar rights become mere Seventh Class Claims against decedent’s Estates. They are treated the same as all other “general” debts of the decedent. In a more equitable world, family rights should have a better priority. There should be another class of claims above Seventh Class to cover marital and family rights. Until that happens, however, the best we can do is to protect our clients at the time of divorce.
© 2000 by Cary A. Lind, all rights reserved