Host Sean Harris talks with OAJ member Susan Richlak about the intersection of probate law and personal injury law.

Sean: Hello and welcome to Civilly Speaking, OAJ’s monthly podcast on practical and timely legal issues, I am your host Sean Harris. Our guest today is Susan Richlak from Mentor, OH, Lake County. She is a solo practitioner primarily practicing in the area of probate and our topic this morning is the intersection of probate law and personal injury law. Susan Richlak thanks very much for joining us here on Civilly Speaking.

Susan: Thank you, I am happy to be here.

Sean: Let’s start kind of at the beginning, which is usually the best place to start and when we’re talking about an applicate in a wrongful death case, our representative of the estate, how should we figure out who is a proper and an appropriate person to serve as the representative.

Susan: Well, one of the primary things I would ask practitioners to kind of step back one quick moment and kind of keep in mind when you are making even those initial determinations that the probate estate has to be open for all purposes and I get asked questions often can’t I just open it for the purpose of our litigation and that answer is unfortunately no. So we have to take into consideration everything so we have to manage the estate just like we would if this were you know a million dollar estate. So the first key is determining if there is a valid will and if so looking at the terms of the will because within there you’re going to have an indication of who is the main executor, has the bond been waved and so forth. So if there is a will that names a party or a person to be the executer that’s the person who must serve unless that person waives their rights. So that’s the first step and if they’re often times we’ll have somebody who wants to be the executer that’s maybe the number two person named, as long as you have waiver that works. If there is not a will, then we have to look to the Ohio revised code for who can administer an estate and there’s a couple qualifications. First the person has to be an Ohio resident and that is mandatory, there’s is no way around that one and then there is the listing of family members, next of kin who have priority. So a surviving spouse would be first and then the end that if any next of kin who will meet the qualifications to serve.

Sean: And many times, of course, threes nobody who meets the qualifications to serve.

Susan: That happens often as well and sometimes I will be asked to then make my own application, I just did a couple here in Ohio, where one you know all the family members just happened to live out of state and there’s nobody here with Ohio residency and then another one where the only next of kin was a minor and that obviously wasn’t going to work either so in that case when you can have non-family applicant usually the courts do scrutinize that a little bit further, but typically I will get waivers from all of the next of kin even though they themselves can’t serve just to show to the court that they do consent to my being the applicant and that typically works well.

Sean: And I know one of the questions that always comes up in my mind as a personal injury practitioner is when a probate lawyer is servings as the personal representative as well as council, how do you kind of make those two roles work?

Susan: Well when I’m council for the estate as well as being the administrator its sort of is, there typically is no real issue in the case where there are no assets and quite often a lot of these estates are what I call kind of shell estates where there just setup for litigation only and in that case we really just get the estate open and then from a probate perspective the estate just kind of sits there in limbo until the personal injury attorney obtains a settlement or the case is turned back in some fashion. If there are assets then we follow either the will, although typically I am the applicant there hasn’t been a will, or the Ohio revised code for how we would disperse any assets that there are so usually in those cases I just take extra care to make sure that I am including the family members along the way in the process with what’s going just because even though they can’t serve there certainly the beneficiaries of the estate and the court has certain rules obviously along the way. There’s periodically filings that have to be made and notices given to all the beneficiaries so that they keep informed along the way.

Sean: Yeah, certainly can’t help, can’t hurt rather to provide more information to the beneficiaries as opposed to less.

Susan: Yes, yes and one of the other kind of practitioners notes in those cases is because in that case I am actually a party that requires my attendance often at the matters involving the civil litigation also, so I always kind of stress to the practitioners if you want to kind of minimize my involvement to you know kind of make some agreements with co-council perhaps that maybe for certain things my attendance wouldn’t need to be required.

Sean: Now Susan sticking with the topic of wrongful death claims and estates and we tend to, at least I do in my mind kind of lump together wrongful death and survivorship, but I gather in the probate courts mind there’s obviously separate claims, but there’s  separate claims and there meaningful differences between them?

Susan: Yes, very very meaningful. That was one of my early on lessons when I started out working at a personal injury firm and being the designated new kid on the block to handle all the probate things that nobody wanted to so it was kind of trial by fire in my case and I realized very quickly as I made some mistakes in those initial filings and not understanding that distinction. So from a probate perspective any funds that are allocated to a survival claim, so that would be when a person is in an accident, it’s the period of time when they were alive and consciously suffered pain. Any portion of proceeds that gets allocated to that type of a claim belongs as to the estate would be an asset of the estate and there’s two distinct beneficiary pools, so when we’re talking about survivorship claims those go to the estate and the beneficiary of the estate are either folks that are named in the will as beneficiaries or if there is no will then Ohio revised code 2105.06, going back to early law school probate days would tell you who the next of kin are and those can often be a different pool of people than the beneficiaries that are designated in the revised code wrongful death statue 2125. So you do have to be careful in terms of what you’re allocating where because the survival claim proceeds are also considered an estate asset that are available for creditors and if there is a spouse there’s certain spousal elections where a spouse has rights to certain proceeds and creditors can also get in. Very often when you bring the application for approval the probate court will be asking questions like you know was there a survival claim period because they’re looking at the potential creditors of the estate to make sure that there is a fair amount allocated to that survival claim.

Sean: And let me follow up on what you just said there cause I know this a question that comes up in a lot of these cases, is it, am I correct did I hear you correctly that creditors can get to money in a survival that’s allocated to the survival claim but not to a wrongful death claim?

Susan: Correct. So the wrongful death proceeds according to the wrongful death statute are for the benefit and compensation for the loss of those beneficiaries that are specifically outlined in that statute, it did not become a probate asset that’s available to creditors. So for example I just had an estate where the, it was a pure, what I call a pure wrongful death case, the gentleman was driving in a vehicle and was literally decapitated under a truck so he his death, per the death certificate it was instantaneous  so there was no survival claim period. So all of the recovery was allocated to the wrongful death beneficiaries. In his estate he had a house that had to go into foreclosure and a car that got repossessed   and both of the creditors filed claims against the estate for their deficiency balances and we were able to basically tell them they can’t get any of the wrongful death proceeds even though there was a you know a nice settlement there because those assets are not available for those creditors.

Sean: And well then of course begs the question then, how is it determined and allocated between the two claims, how much, I mean you can imagine situations where there would be creditors out there and you’re right well-meaning council would wish to shield the settlement funds and decide to put more into the wrongful death, how are we supposed to make that allocation?

Susan: You know unfortunately that wrongful death statute does not provide any formulas so it really is a matter of in the application process the fiduciary typically is the party whose going to work with personal injury council to propose a settlement allocation to the court and when doing that if I’m working you know with the attorney we typically look at you know how long was the survival period compared to the wrongful death claim. In cases were the decedent died relatively quickly then obviously our survival claim allocation is very small. In some of the nursing home cases however where you might have had you know a client who lived a good long period of time and endured bed sores and whatever else was going on then your survival claim is going to be a little bit greater. It also quite frankly depends on which county you are practicing in, where you’re bringing the application…

Sean: You mean different probate, different probate judges are different?

Susan: Oh, yes.

Susan: Yeah, I mean it really helps to know you know how a particular courter even within one court different magistrates might view these issues. Now one practitioners note one of the things you know we try to encourage is before you start opening an estate one way to kind of eliminate some of the creditors issues is actually to delay the opening of the estate, which I know makes personal injury practitioners very nervous, but creditors of the estate and I am setting aside I am not discussing right now Medicaid estate recovery and some of the other priority liens but general creditors of the estate have only six months from the date of death to present a claim and in order to validly present a claim they basically have to make the claim after the estate is open. So sometimes we will actually delay opening the estate and wait out that six month period, it’s not to say that the creditors aren’t still going to come calling, but that gives us the best option to then there after deny their claims so I do encourage folks to do the other parts of your claim and in some cases wait that out and I think that’s a little bit of a kind of malpractice alert so to speak because we’ve had some claims where the creditors’ claims were significant and the person had actual probate assets also and if you run and jump and open the estate and put some of those assets in jeopardy, you know I have a little query there whether someone could potentially if they ever found out wait a minute if I would have waited to file this we could have not paid this, you know hundred thousand dollars or whatever it is. So that’s one of the things you know at the outs that I like people to kind of sit through and consider a little bit of what claims are out there and who has what hanging out there as far as creditors.

Sean: Sure, now and forgive me Susan, can creditors come into the probate court and challenge an allocation? I mean if councils decided we’re going to allocate more the wrongful death and less to the survivorship and they somehow get wind of this can they come in and say we think you’re trying to do this fraudulently or properly something like that?

Susan: Right, I wish I had a black and white answer for that. There is a super intendants rule that talks about giving notice of the settlement approval application to quote on quote all interested parties and so we do often wonder whether that might be interpreted to include creditors. Again, that might be a situation where if you’re proactively kind of managing the probate aspects. You can reject a creditors claim so let’s say so you think there’s a claim out there or somebody presents a claim, I as the probate council would send them a rejection of claim and they have a certain period of time within which to file suit on the rejection and challenge my reduction at some point and if they don’t do that within the time frame and for small creditors or even really mid-range creditors that would involve a lot of effort on their part. You know then they have to perhaps hire an attorney and file suit to try to dispute my rejection.

Sean: Right.

Susan: If they don’t do that within the creditors, you know within their time frames, then their claim is forever barred so it might be wise for practitioners to try sort out all those creditor issues and take care of some of that before they make applications to approve a settlement and that way you know that creditors claim would have already been extinguished.

Sean: Well you mention the six month time frame for making claims against an estate in the context of the plaintiff or our clients being deceased, we’ve also run into situations where the defendant or the tortfeasor is deceased. Talk to us about that six month timeline in regards to filing a claim against a deceased defendant.

Susan: Yes, well we can talk and we should probably talk a little bit about that whole process to, but in terms of claims I do get those calls where somebodies in a panic thinking do I need to get this estate open within six months even though maybe you’re statute of limitations period is far from expiring. In that case of a creditors claim my opinion is that unless you were trying to assets of the estate of that decedent then that creditors bar isn’t going to bar you from you know whatever other recovery you have as far as the insurance and so forth. However, I do worry sometimes that some insurance carrier or attorney representing them will try to start making that type of a claim, so again the sooner you can get ahead of some of these and open an estate the better on these defendants estates for example, you know I try to tell practitioners if you have one of those horrible accidents where there’s multiple deaths in the accident itself and you know that the decedent has already passed away, you know there should be huge red flags everywhere on your file that in order to pursue something you’ve got to get the defendants estate open also. In today’s world of as far as probate goes many people do not need to open an estate for their own purposes. If you have all your assets are joint with the right of survivorship or people these days who just don’t have assets they may not need to open their own estate and very often I will get calls from practitioners in a panic because their going to file suit and when they do their Lexis search or update the address they realize that the defendant is deceased and in those cases because you know this is not your client where we can just call them and get all the waivers and consent and get an estate open quickly, you know very often it can take several months to get all the moving parts together and put together the right notices to be able to get that defendants estate open. I also get that same question if the action has already been filed and the case is pending, but the defendant dies, now a suggestion of death is filed and then the practitioner only has a couple of months to you know get an estate open and get that prop of hardy substituted in and if you don’t mind a little bit more on that.

Sean: Sure.

Susan: You know when we do that so my typical process is that I would try to reach out to potential next of kin if we have some information for them, but very often you know we don’t have good addresses or we don’t even know who they are in those cases the probate process requires us to do at least three weeks of publication before they will make an appointment. Now some courts there is also a procedure, that’s kind of what I call a short quick form called the application to appoint a special administrator and sometimes if I am called at the eleventh hour, which happens often, I am able to get the court make kind of what I call a sort of temporary appointment of need just for the service of process, but then we do have to jump through all the proper hoops to notify the family of the defendant and go through the proper steps to have a full estate administration open and in some of those cases, you know be the expense of that can be quite significant so in smaller cases or you know sometimes this could occur just within the context of a personal injury claim where the defendant happens to pass away you’ve got a five thousand dollar, potential five thousand dollar claim, you know sometimes it’s just not cost effective to go through all of that procedure to open an estate to pursue the claim, but if you’re calling me at the eleventh hour where you don’t have time to turn the case back and you know do what you need to do you know sometimes you just got to open it anyway.

Sean: Susan talk to us about some of the timing issues and other claims that can come up in the probate context as well.

Susan: So we talked a little bit about the issue of creditors’ claims and how that impacts and perhaps waiting out that creditors period, the other issue is really kind of looking at what type of a claim you have and how much case you value you put on that to make sure that the amount that you’re going to be able to recover is going to be enough to include some of those expenses and one of the issues that kind of comes up a lot with that is the nursing home cases when we have Medicaid estate recovery. So in those cases, you know even if the survival claim is a short one, you know those lien holders are going to be looking at getting some kind of recovery. So you know sometimes we talk about, not waiting out the six months isn’t going to necessarily help that issue, but let’s say for example in the nursing home setting, you  know where you’ve had a client that is on Medicaid and has been on Medicaid for an extended period of time you know we’ve seen and you’ve probably seen the Medicaid estate recovery bills where you know those could be in the hundreds of thousands of dollars so in those cases you know you might look at how quickly am I going got be able to open this estate, who are the parties that are going to be able to recover from that and is there going to be enough money after we try to negotiate that and pay all these expenses off that you know it makes sense to do and in some cases and in cases like I said where it’s just an injury claim, you know very often I will tell the clients it just may not make sense to pursue this or if you have enough time, sometimes you can sort of put the ball back in the clients court a little bit and say look you know we have a potential injury claim that’s worth xyz amount, I think we have some pretty significant liens here or other issues, if you want to go and get an estate open and have an executer appointed you know then we can talk about what makes sense to do from there.

Sean: Anything else?

Susan: One other thing I try to remind practitioners of is if you try to do things on your own without knowing some of the probate process and procedure there are kind of some telltale signs that give the court a heads up that you maybe don’t know the probate rules and that tends to irritate the probate judges. So when you’re filing you’re initial application there is a next of kin form where you need to identify the proper parties who would inherit from the estate not the wrongful death plaintiffs just straight probate and very often I see a lot of extended family members listed on that form and those might be parties that would benefit under a wrongful death, but not under the estate. So when the courts review your filings and they start seeing people that don’t belong they kind of have their dander up about that. And the other thing is with that is that you whenever you make subsequent filings the in the probate court the court is going to expect that you serve notice very often on all these people listed, half of whom maybe you don’t even need to serve, but sometimes the clerks that are taking those subsequent filings they’re not going to tell you to correct something they’re just going to with whatever you have on there so very often you know that is sort of a telltale sign and when the judges and then looking at approving contingency fees, you know they’re going to be looking to how was the state administered, were things filed properly and timely. For, you know every estate while it is open there are certain filings that need to be made along the way, there’s an inventory and an account. Now some courts will allow you in a case where it’s open just for litigation only, the courts may allow you to not make those filings, but sometimes you have to make it an affirmative motion to request that. So again that’s another where just kind of knowing the probate rules and how the various counties handle those can be helpful and if you don’t make the proper filing the court will eventually issue a citation to remove the fiduciary and since the fiduciary is really your client who has authorized you to investigate and pursue the claim, if they get removed a new administrator is appointed, you know they can hire their own personal injury council, so it’s important to kind of know the probate rules. We hear often that our probate committee meetings and when the probate judges speak on this they do kind of get irritated when attorneys come in and they don’t really know the probate process and they just come in and from the probate judges perspective they think all they care about is getting their fee approved and moving on without kind of having done what they should have down throughout the probate administration.

Sean: And I think you’re right, it seems in my experience that paying attention to individual county local rules and individual judges and magistrates seems all the more important in the probate context as compared to common pleas.

Susan: Yes, yes like I have said I have had the privileges of being in probably about eighty percent of the counties and for any practitioners who are going to do something on their own and haven’t been to a county before, it’s really important to try to get some local intel on that. I am assuming you are going to give my name out at some point, I keep a kind of master log of all the counties that I have been in, who the friendly clerks are, what the little quirky local l customs are, anyone is always welcome to call if you have a question about a particular county. Sometimes I can you know give some guidance in terms of what types of fee amounts might get approved and how even some of the case expenses we’re finding out some in particular counties they are just getting really kind of stingy for lack of a better word on what kind of case expenses you can bill. So there’s certain counties where when you submit your application and you have to provide a list of all of the deductions that are coming out, you know there looking at overnight stays and hotels for deposition and food and you know just some of these miscellaneous things, I have had some courts say we’re not approving that so it’s good you know sometimes when we do a little audit of the expenses and kind of clean some of those up because I’d rather see the attorney get a full forty percent approval on say a tough malpractice case where as sometimes quite frankly if there’s a lot of other expenses that the court doesn’t like and there dander is up  of and then there going to say you know what you’re not getting a forty percent.

Sean: All it takes is one thing.

Susan: Right, and same goes for you know, they know at the outset again, if you’re filings aren’t accurate and so forth and you know the court has constantly had to send you the nasty green card, the reminders because you don’t file anything timely when it comes time to that approval application, you know the courts going to look at that history.

Sean: Well Susan Richlak this has been wonderful and informative, we thank you very much for joining us on Civilly Speaking.

Susan: Thanks so much.