Legal Question in Wills and Trusts in New Jersey
Estate Account and Fatal Car Accident
Last Easter, my 78 year old father was involved in a car accident. He unexpectedly experienced a fatal heart attack while driving and hit several cars. There were some injuries (most serious was the removal of a spleenand others had broken bones), but my father was the only fatality. He was not under any medical driving restrictions.
My dad had $250,000/$500,000 liability on his auto insurance. I also understand that the injured parties PIP insurnace would have to pay first on their medical bills and then they could sue my dad's insurance company for the difference.
We have put his assets into an estate escrow account(including the proceeds from the sale of his house). How long does this account need to remain in escrow? I believe that personal injury statute of limitations in NJ is 2 years. Does this account need to stay open longer than 2 years from the date of my dad's death before disbursement can be done?
2 Answers from Attorneys
Re: Estate Account and Fatal Car Accident
The executor will want to be careful here. The lawsuits could take many years to settle. The executor should file a 'notice to limit creditors' with the surrogate if he hasn't already.
Distributions can be made but the executor will need to obtain releases, refunding bonds and indemnification agreement from all beneficiaries beforehand. That will require the beneficiaries to return their pro-rata share of the distribution to the executor if the estate is eventually liable on a claim.
Holding funds in escrow is a safer approch but may not be practical.
Re: Estate Account and Fatal Car Accident
While I usually agree with Jon, I disagree here. Since the estate has a potential exposure, if the claims exceed the insurance coverage, I do not agree that the assets should be distributed, subject to the terms of the Release and Refunding Bond for reimbursement of the pro rata share. Once the assets are distributed, the ability to get any portion back to meet the claims against the estate may be difficult. I concur that a Notice Limiting Creditors be issued promptly, but knowledge by the executor that there may be possible claims, which must be filed within the limitations period, puts the exector at risk if the assets are distributed. I suggest maintaining the escrow regardless of how long the suits may take, to assure that the funds necessary to meet the final claims are intact.
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