Litigation Only Estate

What is the name of your state (only U.S. law)? PA

My father passed away in April. Very simple estate, all joint with my mother. We never opened an estate for him. Mom passed six weeks later. An estate has been opened in her name to distribute assets to the children. Biopsy taken just before my father's death retured "advanced mesothelioma" which is almost always caused by asbestos exposure. We are pursuing compensation from asbestos trust funds, etc. We have now opened an estate for my father for "litigation only". That's the background, here's the question.

Assuming we receive compensation, can these proceeds be distributed directly to the children? Or will they need to go through my mother's estate first, since she did survive him?

Thanks for any advice.

That is a very good question.

I suggest that you discuss with your probate lawyer.

My GUESS is that it will go to the heirs of both.

Thanks for the kind words. If I already had a probate lawyer, I probably wouldn't have posted here.

Been trying to handle things myself. Up to this point, it's been very straightforward. This may be enough complexity for me to go ahead retain the services of an attorney.

Also, maybe it would help to summarize the wills.

For dad's will, everything went to Mom. If Mom predeceased Dad, then everything divided equally between the three children.

Mom's will was similar. Everything to Dad. If Dad predeceased Mom, then everything divided equally between the three children.

So at this point, everything is going to end up split between myself and my sisters. It's just the mechanics of whether I can distribute any proceeds direct from Dad's estate or whether they have to pass through Mom's estate. If the latter, then I'm guessing we get "double taxed" with PA's inheritance tax, which would be a minor bummer.

I admit ignorance of asbestos exposure compensation claims and you are best off consulting with an attorney, as seniorjudge suggested.

However, following a logic trail.... If you opened a probate estate to make the claim, then the claim is being pursued on behalf of your father's estate. No? Therefore, any compensation will be to your father's estate. And, the funds will be distributed to your mother's estate to be distributed per her will.

The Inheritance Tax rate for assets transferred to a surviving spouse is 0%. At the time your father passed away, your mother was still alive. So, there is no double taxation.

Good call on the spousal tax rate of 0%. Forgot about that. You're whole train of logic is exactly what I've been thinking. All this means to me now is that I'll need to keep my mom's estate open longer since these settlements can sometimes linger for several years.

Thanks for the advice.

You are better off closing this estate (since it has no assets yet, apparently) so that you will not be assessed any taxes/fees, etc. Better to wait until the compensation is paid and THEN setting up an estate.