Loune-Djenia Askew, Esq.
Sep 19, 2025
A personal injury settlement doesn’t bypass probate—it flows into the estate like any other asset. Before heirs receive anything, Florida law requires payment of probate expenses, creditor claims, and Medicaid liens.
How Probate Affects the Distribution of Personal Injury Settlements in Florida
When someone receives a personal injury settlement and then passes away, many families assume the funds automatically go straight to the heirs. In Florida, however, these settlement proceeds usually have to go through probate—a court-supervised process that oversees the distribution of a person’s assets after death. Understanding how probate works is important because it directly affects when and how heirs actually receive the money.
What Happens to a Personal Injury Settlement After Death?
If a person passes away after receiving or being awarded a settlement, the money becomes part of their probate estate. That means the funds are subject to the same rules as other estate assets: the court will first make sure debts, taxes, and other legal obligations are satisfied before heirs or beneficiaries receive their share.
Priority of Claims Against the Settlement
In Florida, certain claims take priority when distributing estate assets, including personal injury settlements:
Administration Costs – Probate costs, court fees, and attorney’s fees are paid first.
Creditor Claims – Creditors, such as credit card companies, medical providers, or lenders, may file claims against the estate.
Medicaid Liens – If the deceased received Medicaid benefits, the agency may be entitled to repayment from the settlement funds.
Taxes – Any outstanding state or federal taxes must be addressed.
Heirs and Beneficiaries – Only after these obligations are satisfied can the remaining funds be distributed to the heirs named in the will, or under Florida’s intestacy laws if there is no will.
How Probate Can Delay or Complicate Settlement Payouts
While probate ensures everything is handled legally, it can also slow things down:
Delays in Distribution – Heirs may wait months, or sometimes longer than a year, before receiving their share of the settlement.
Disputes Among Heirs – If family members disagree about how the funds should be distributed, the probate process can become more complicated and drawn out.
Reduced Inheritance – By the time creditor claims, Medicaid liens, and court costs are satisfied, heirs may receive less than expected.
Example: Imagine a person receives a $200,000 settlement and then passes away. If Medicaid files a lien for $50,000, creditors submit valid claims for $30,000, and probate/legal fees cost another $20,000, only $100,000 would remain to be split among the heirs.
Final Distribution to Heirs or Beneficiaries
Once all claims are resolved and the court approves, the remaining funds are distributed to heirs or beneficiaries. If the person left a valid will, distribution follows their instructions. If there was no will, Florida’s intestacy laws decide how the funds are divided—typically starting with the spouse and children.
Why Planning Ahead Matters
Because personal injury settlements often represent a significant portion of someone’s assets, planning ahead can help minimize complications. Steps like creating a trust, addressing potential Medicaid claims, and keeping beneficiary designations updated may help heirs receive their inheritance faster and with fewer legal hurdles.
✅ Key Takeaway: A personal injury settlement doesn’t bypass probate—it flows into the estate like any other asset. Before heirs receive anything, Florida law requires payment of probate expenses, creditor claims, and Medicaid liens. While probate protects fairness, it can also reduce the final inheritance and delay distribution.
For more information, contact our office at Askew & Associates, P.A. by calling 954-546-2699.
Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns.