Set the order in which a solvent estate meets its debts
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the asset list and the will, sort the assets into the six classes in Schedule 3 Part 2 and note any clause that directs a different order or a charge. Leave the final order blank. The tool does not pay a creditor.
- What the lawyer must review
- Section 46C of the Probate and Administration Act 1898 (NSW) says that where the estate is solvent, the real and personal estate is applicable towards the funeral, testamentary and administrative expenses, debts and liabilities, in the order in Part 2 of the Third Schedule, subject to the provisions of any Act as to charges on property of the deceased and to the provisions, if any, in the will. Solvent means sufficient for payment in full of the debts and liabilities. The section applies to a person dying after the commencement of the Conveyancing (Amendment) Act 1930. That commencement date was not opened. Part 2 sets this order. First, assets undisposed of by will, subject to retaining a fund sufficient to meet any pecuniary legacies. Second, assets not specifically disposed of by will but included, by a specific or general description, in a residuary gift, subject to retaining a fund sufficient to meet any pecuniary legacies so far as not already provided for. Third, assets specifically appropriated or disposed of by will, by a specific or general description, for the payment of debts. Fourth, assets charged with, or disposed of by will subject to a charge for, the payment of debts. Fifth, the fund, if any, retained to meet pecuniary legacies. Sixth, assets specifically disposed of by will, rateably according to value. Part 1, which is the insolvent order, was read and is not this task. The Bankruptcy Act rules are not applied on this note.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | From the asset list and the will, sort the assets into the six classes in Schedule 3 Part 2 and note any clause that directs a different order or a charge. Leave the final order blank. The tool does not pay a creditor. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Use Part 2 only if the estate can pay the debts and liabilities in full. The insolvent order is a different part.
- Read the will, and any Act about a charge on the property, before applying the six classes.
- Keep a fund for pecuniary legacies out of the undisposed assets and, so far as needed, out of residue, before those classes are applied to debts.
- Specifically disposed assets are last, and they bear the debts rateably according to value.
Sources
- Probate and Administration Act 1898 (NSW) section 46C · 2026-10-22
- Probate and Administration Act 1898 (NSW) Schedule 3 · 2026-10-22
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.