Personal Injury Cases as Probate Assets: How Do They Work?

Of all the assets and property that you may think of when thinking of property that is part of someone’s estate, there is one asset that often is overlooked—personal injury claims. Often, people pass away after they are injured, or even while a personal injury claim is pending in court.

A Big Dilemma

The personal representative or executor then doesn’t know what to do with this asset. It has a value…but not a definite one—in fact, you may not even know if the case will settle or if it’s even a good case.

You don’t want to walk away from it, or ignore it—the case may have significant value for the estate, and you’d imagine that the deceased would have wanted his or her family to benefit from the compensation that he or she should have or would have received.

The Case Can Continue

You, as the personal representative of the deceased, do have the right to continue the case in the name of the deceased, and on behalf of the deceased’s estate. Of course, to do that you may have to be named as a personal representative, if you haven’t already.

Once you are appointed a personal representative, even if there is no lawsuit filed for the injury lawsuit, the personal representative can file a lawsuit for damages in the event the deceased passed away before a lawsuit was able to be filed in court.

If a lawsuit does need to be filed, the personal representative has either the statute of limitations for the claim, or a year, whichever is longer.

If the deceased passed away while a case is pending (already filed), an estate must be opened in the probate court, and the estate must be substituted as a party in the personal injury case (you may already have an estate opened in the probate court; if so, this step is a lot easier).

The law only provides 90 days to do that, so representatives need to act fast. Your probate attorney will handle the estate matters in coordination with your or the deceased’s injury attorney.

Who Gets the Assets – Who Makes the Decisions?

Once you’ve done what needs to be done, and you file or continue the injury case, often, another problem arises: most people don’t plan for an injury lawsuit in their estate documents. That means that often, even with a comprehensive estate plan, the proceeds of the injury case will pass intestate.

And there’s another problem as well: The personal representative is charged with making the decisions about the injury case, the same way the deceased would have been. The representative will, for example, make the decision on whether to settle the case and for how much, or whether or not to go to trial.

This can create conflict between the representative and the relatives of the deceased, if they have differing views or different levels of risk, and thus, can’t agree on whether to settle the injury case or not.

We can help with your probate and estate law questions or problems. Call the West Palm Beach estate planning lawyers at The Law Offices of Larry E. Bray today.

Sources:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0768/0768.html

floridabar.org/divcom/jn/jnjournal01.nsf/Author/8E0E61F2855F404485256C62006E36CD