Wrongful Death in Pennsylvania When the Decedent Lived in New Jersey

In this region, significant legal and logistical questions often arise where a Wrongful Death occurs in Pennsylvania, but the individual who died was a resident of New Jersey. Chief among them is jurisdiction, which states that the state’s law governs the case. The reality is that both Pennsylvania and New Jersey law will often apply, but to different aspects of the matter. These cases generally involve a wrongful death claim and a Survival action. Each is treated differently under the law.

Wrongful Death Claims for Out-of-State Residents

The wrongful death claim is based purely on statute. These claims seek to compensate the decedent’s close family members—specifically, their dependents—for the loss resulting from the death. Pennsylvania’s Wrongful Death statute (42 Pa. C.S. § 8301) governs this portion of the case, even if the decedent was a New Jersey resident. The claim is an asset within Pennsylvania; thus, it is subject to Pennsylvania’s laws.

Under Pennsylvania law, the claimants to whom compensation for wrongful death is paid include only the spouse, children, or parents of the deceased. This does not regard the decedent’s will and follows Pennsylvania’s intestacy laws. The action is typically initiated by a personal estate representative, appointed under New Jersey law through the Surrogate Court in the county where the decedent lived.

It is critical to recognize that although a New Jersey resident may have died, Pennsylvania’s rules define the eligible beneficiaries and control the distribution of any recovery under the wrongful death claim. This distribution follows Pennsylvania’s intestacy laws, not New Jersey’s, regardless of whether the decedent had a will.

Court Approval for Minor or Incapacitated Beneficiaries

All parties may enter a settlement if all the wrongful death claim beneficiaries are consenting adults. If any of the wrongful death beneficiaries are minors or incapacitated, court approval of the settlement is required under Pennsylvania’s Rules of Civil Procedure. A personal injury attorney cannot settle the case or make a distribution until the court approves the same. This is because minors and incapacitated individuals cannot consent. The recoveries for these individuals must either be placed in a restricted account, a guardian’s account, or some manner of trust as the court approves. Establishing a trust (often a Special Needs Trust or Settlement Protection Trust) is typically advisable.

Tax and Creditor Protection for Wrongful Death Proceeds

Importantly, wrongful death proceeds are not subject to federal or state estate tax or taxed under either New Jersey or Pennsylvania inheritance tax regimes. Additionally, these funds are not income for tax purposes. While the funds are not taxable, it is often advisable to engage in some manner of estate and tax planning for the recipient to avoid or reduce future estate or inheritance taxes. Furthermore, these proceeds are protected from the decedent’s creditors, though once distributed, they may be subject to the creditors of the individual recipients. Planning is often advisable to preserve these funds.

Survival Actions in Cross-State Wrongful Death Cases

The Survival action, by contrast, is meant to recover damages the decedent could have pursued had they lived, such as for pain and suffering, lost earnings, and medical expenses. The estate files this claim. The estate’s representative—either an executor (if there was a will) or an administrator (if there wasn’t)—must be appointed by the Surrogate’s Court in the New Jersey county where the decedent resided.

New Jersey law dictates who may serve as administrator and how proceeds from the Survival action are distributed when there is no will. Pennsylvania caselaw dictates that when an estate settles a claim, court approval of the settlement must be sought. Similarly, under local Rules, the District Court for the Eastern District of Pennsylvania (and others) requires approval where the estate settles claims.

Distribution and Tax Implications of Survival Action Proceeds

While Pennsylvania law (42 Pa. C.S. § 8302) authorizes the claim, New Jersey law controls who benefits from the recovery, by and through the estate. Funds from the Survival claim flow through the estate and are subject to estate-related obligations. If there are minor or incapacitated beneficiaries, establishing a trust may again be advisable, if not necessary, to manage distributions efficiently.

Estate and inheritance tax consequences must be carefully evaluated for the Survival portion. The Survival proceeds are included in the taxable estate and are subject to federal estate tax depending on the estate’s value and the applicable exemption for the year of death. For example, the federal exemption amount varied over the years, reaching $13.99 million in 2025. This threshold is expected to be reduced in 2026.

New Jersey Inheritance Tax and Post-Recovery Estate Planning

Although New Jersey eliminated its estate tax for deaths occurring on or after January 1, 2018, it still imposes an inheritance tax on certain classes of beneficiaries. This applies to many heirs, with exceptions for spouses and lineal relatives. The tax rate and exemptions depend on the relationship between the decedent and the beneficiary.

As noted above, clients can often take advantage of significant benefits by utilizing an experienced estate attorney. For example, it is usually advisable—even if not legally required—to file a federal estate tax return (Form 706) with the IRS to secure the deceased spouse’s unused tax exemption portability. This tax credit may provide considerable savings to the family for decades after the surviving spouse dies. Surviving heirs often also require significant changes to their estate plans after receiving a large recovery.

Creditor Claims, Bonding, and Final Estate Administration

Since the survival proceeds pass through the estate, they are subject to claims from the decedent’s creditors. An administrator or executor may be required to post a bond, primarily when no will exists or the will does not waive this requirement. If bonding is problematic (for example, if the appointed administrator cannot qualify due to prior criminal history or credit issues), courts may authorize alternative solutions such as assigning a co-administrator or directing funds to be held in the attorney’s trust account.

If the estate receives a significant recovery, the personal representative must complete an account and place the final distribution before the court. This process protects the personal representative and assures us there is no ongoing exposure to fiduciary liability after the matter is concluded.

Strategic Allocation Between Wrongful Death and Survival Claims

Proper allocation between wrongful death and survival components is crucial and should be carefully considered. Key factors include:

• Tax implications (estate and inheritance tax)
• Creditor exposure (Creditors may reach survival proceeds; Wrongful Death proceeds generally are not)
• Beneficiary differences (each state’s intestacy laws define different heirs)
• Needs of beneficiaries (does one class have more need for compensation than another)
• Bonding requirements for estate representatives

Strategic allocation can help maximize the benefit to the intended recipients while minimizing administrative complications. Though this step typically occurs at the conclusion of a case, it can significantly impact the family’s net recovery.