A few years ago, we worked with the family of a man from Queens who was seriously injured in a commercial vehicle accident. He filed a lawsuit, but the litigation dragged on. Eighteen months later, he died from an unrelated illness before his case ever saw a courtroom. His widow called me, distraught, asking a simple question: “Is it all over? Does the case just disappear?”
The answer, which surprised her, was no. In New York, a personal injury claim is a legal asset—just like a bank account or a piece of real estate. And like other assets, it does not simply vanish upon death. Instead, it becomes part of the decedent’s estate, a concept that sits at the intersection of personal injury law and the work we do in estate planning.
Most people think of these as two entirely separate worlds of law. But when a serious injury occurs, they can collide with significant consequences for a family’s future.
Your Claim Can Survive You
Many New Yorkers are unaware of a vital legal principle known as a “survival action.” The governing statute, New York’s Estates, Powers and Trusts Law (EPTL) § 11-3.2, is explicit: a personal injury cause of action is not lost because of the death of the person who was injured. The law allows the personal representative of the estate—the executor or administrator—to step into the decedent’s shoes and continue the lawsuit on behalf of the estate.
This is not a wrongful death claim, though the two are often confused. A wrongful death claim is a separate action brought by the family for their own economic losses resulting from their loved one’s death. A survival action, by contrast, seeks recovery for the pain and suffering the decedent personally experienced from the moment of injury until the moment of death.
Think of it this way: the survival action is the lawsuit the injured person would have continued themselves, had they lived. The estate’s representative simply carries it forward. Any damages recovered are paid directly to the estate.
Where the Money Goes: The Will or the State
This is where diligent estate planning becomes critical. Because a recovery from a survival action flows into the estate, it will be distributed just like any other asset. If the decedent had a well-drafted will, that document dictates who receives those funds. They will be paid out to the beneficiaries named in the will, under the supervision of the executor and, ultimately, the Surrogate’s Court.
But what if there is no will? The situation becomes far more rigid. The proceeds of the lawsuit will be distributed according to New York’s intestacy laws. These are fixed, impersonal rules that dictate which relatives inherit and in what proportion. The decedent’s wishes, spoken or unspoken, become irrelevant. The state decides. An estranged child might inherit a portion of the settlement, while a devoted life partner who was not a legal spouse may receive nothing.
This is a contingency few people consider when they are healthy. But a catastrophic injury can happen to anyone. Planning for how a potential legal award should be managed is an act of prudent stewardship.
Planning for Incapacity and Large Settlements
The need for planning is not limited to the event of death. What if the injured person survives but is left incapacitated, unable to manage their own affairs or make financial decisions? A large settlement paid directly to an incapacitated person creates an immediate crisis. Who will manage the money? Who will pay the bills and ensure their long-term care needs are met?
Without proper documents in place, the family’s only option is often a costly and public guardianship proceeding. They must ask a court to declare their loved one legally incompetent and appoint a guardian to manage their finances—a process that can be both emotionally taxing and bureaucratic.
A durable power of attorney and a health care proxy could have prevented this entirely by pre-emptively appointing a trusted agent. For very large settlements, we often advise clients on the use of trusts. A trust can hold the settlement funds, managed by a trustee—a fiduciary with a legal duty to act in the beneficiary’s best interest. This structure provides professional management, protection from creditors, and a clear plan for how the funds should be used for the beneficiary’s care and quality of life.
A personal injury lawsuit is often the last thing on anyone’s mind when they sit down to create an estate plan. But life is unpredictable. A deliberate plan is not just about what happens when you die; it is about building a framework to protect you and your family through all of life’s major events, including the ones you never see coming.
If you or a family member are expecting a significant settlement from a lawsuit, the wisest first step is to understand how those funds will be treated. We can schedule a confidential review to discuss how a potential award might impact your financial future and integrate with your long-term legacy goals.
