FOR IMMEDIATE RELEASE
June 21, 2005
Contact:  Erin K. Kelly
(717) 846-2828
ekelly@pasen.gov
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Senate Approves Waugh Legislation To Establish Debt Payment Order for Estates of Decedents 

HARRISBURG – Senator Mike Waugh's (R-York) Senate Bill 509, which amends the Probate Code to further provide for classification and payment of debts when the assets of an estate are insufficient to cover them, was unanimously approved by the Senate on Monday with a 50-0 vote. 

This bill adds the Commonwealth and its political subdivisions to the list of parties that may lodge a claim against an estate for outstanding obligations, such as taxes.  Previously, the Commonwealth and municipalities were grouped under the "all other claims" section of the statute, which increased their difficulty in collecting from the estate. 

Waugh reintroduced SB 509 after its predecessor, Senate Bill 304, was vetoed by the Governor in 2004 due to language added in the House, which has been removed from SB 509. As with Senate Bill 304, language has been included to protect claims by the Department of Public Welfare against the estates of those who receive Medical Assistance. 

"I introduced this legislation at the request of a constituent who is also the mayor of a York County municipality," said Waugh.  "His municipality experienced great difficulty in collecting an outstanding obligation from a decedent's estate, prompting him to contact my office and request a legislative solution to this matter." 

According to the National Conference of State Legislatures, 42 states put taxes on a list of priority debts to be paid, but Pennsylvania is one of a few states that does not assign a priority of any kind for claims against estates for taxes. 

Some states rank taxes as high as second; most prioritize them between third and sixth.  Waugh's legislation would put debts owed to the state or political subdivisions sixth on the list of priorities. 

"It is important for us to ensure that the claims against an estate by both the Commonwealth and the municipal governments are paid in full, and adding such claims to the priority list of payments will do just that," said Waugh. 

The Senator's legislation would amend existing law to provide for a rule similar to the Uniform Probate Code, promulgated by the National Conference of Commissioners on Uniform State Laws.