I can’t count on two hands how many times I’ve heard from clients, during a discussion on probate, the Notice of Creditors, and the requirement that creditors be paid before beneficiaries: “I don’t have any debt, so I don’t think creditor claims are going to be an issue.” Or so you think. Sometimes creditor claims are unknown during your lifetime or arise at your death. The latter is playing out currently for the Estate of Jose Fernandez, a rising star baseball pitcher for the Miami Marlins who died in a boating accident in September of last year.
Jose Fernandez was a young pitcher who had a short but promising career before he passed. He was expected to sign one of the richest contracts ever for a pitcher in the near future, but had so far amassed a net worth of about $2.5 million. On the date of the his death, he and two male friends had been on a boat in the ocean near Miami when the boat crashed into the rocks of the shore, throwing the men from the boat and killing all three. All three men had been drinking, and Jose and one of the others had cocaine in their systems. Jose was the only of the three who had a blood alcohol content over the legal limit for boating in Florida. There is mixed evidence of who was actually driving at the time of the accident.
The families of the two male passengers filed two separate lawsuits against the Estate of Jose Fernandez seeking $2 million each – more than Jose’s total estimated net worth. They are asserting a claim of negligence against Jose’s Estate because claims against an individual become claims against their Estate after they pass. If Jose was driving the boat drunk, his Estate will have to pay for the damages that resulted.
There is a common misconception that creditor claims only relate to defaulted debts. That’s simply not the case, as evidenced here. Personal injury, breach of contract, negligence, and defamation claims can often result in creditor claims against an Estate after someone passes, even if the claim was not known prior to their passing. While planning to avoid probate does not avoid the duty to pay the debts, it does avoid the administrative burden of complying with the Notice to Creditors and 90-day freeze periods related to such debts.