Tagged: estate planning

When Is A “Personal Representative” Not A “Person?”

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Is a personal representative a “person,” at least for one specific purpose? That was the question asked and answered by the Nebraska Supreme Court. The answer was no.

A little background would be helpful to understand what’s going on. When a person dies and owns property, Nebraska law requires the estate (meaning the collection of property that the person who died owned at the time of death) be opened through a process called probate. In the probate process, an individual called a “personal representative” is appointed to accumulate the property of the person who died, pay the creditors, then divide the property either based on the directions of the will (if the person died with a will) or Nebraska state law (if the person died without a will).

In Correa v. Estate of Hascall, Dean Hascall passed away in 2009. His widow, Neomi, was appointed personal representative of the estate and divided all the property. The estate was closed in 2011, meaning the Court was satisfied that the personal representative did everything she was supposed to do to divide the estate.

In 2012, Neomi and the Hascall estate was sued by Gloria Correa for negligence based on a car accident involving Gloria and Dean in 2008. Neomi asked for the lawsuit to be dismissed, in part because her duties as a personal representative for Dean’s estate had been completed and the estate was closed.

The Nebraska Supreme Court agreed with Neomi. The suit against the estate was dismissed based on a statute of limitations rule that requires a lawsuit against an estate to be brought within three years of the incident giving rise to the lawsuit, which Gloria failed to do.

But Gloria also sued Neomi personally, for negligence. But the Nebraska Supreme Court, in agreeing with the lower Court of Appeals, ruled that a personal representative is not a “natural person” that can be sued, but rather a legal entity that is created through the probate process. And if a personal representative is created by the probate process, then by definition that “person” no longer exists once the estate has been closed.

In some ways, a “personal representative” is similar to the idea of a corporation, in that it is a separate “legal entity” from the individual or individuals that make up the corporation. This “legal fiction” helps to protect the individuals serving in those capacities (or those forming a corporation) from actions outside of their duties as part of that “legal entity.”

So, because Neomi’s appointment as a personal representative ended before Gloria brought her lawsuit, the “personal representative” did not exist for Gloria to sue in the first place. As a result, the Nebraska Supreme Court agreed with the Court of Appeals and dismissed Gloria’s appeal.