Obligation of repaying the deceased's debt before distributing the inheritance

Q: I am the paternal uncle of a person who, as destined by Allah, died in a car accident in Al-Ahsa' leaving behind sons and daughters. The oldest (Part No. 16; Page No. 423) of his underage children was born in 1388 A.H. He left behind no property and was heavily indebted. His heirs are eight children, a mother and two wives. Being the grandfather of his children, I became their guardian. The State gave us a sum of money as he worked as a first class soldier under the presidency of the National Guard. I am really confused regarding such a compensation; should I give it to the creditors or to the heirs? Please, give me a fatwa to abide thereby.

A: Paying off debts, out of this sum of money given by the National Guard in return for fulfilling work duties, vacations and rewards, is given priority over giving heirs their shares thereof. However, if there remains anything of this compensation after settling the debts, it should be divided among the heirs according to each respective Shar`y (Islamic legal) share. May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.