[WSBAPT] How does one apportion a settlement among beneficiaries in combined 1) survival action and 2) wrongful death

[Eric Nelsen]

With a lump sum settlement that covers all of the claims, there is no statutory guidance on apportionment among the claims. The PR of the Estate has to decide how to allocate the funds among the claims and the beneficiaries. In practice, it's best to get all the beneficiaries to agree to the allocation. If they can't agree, then I generally have the PR take a position and present it to the court for approval with notice to all parties. That way the PR is protected from disgruntled beneficiaries by a court order confirming the allocation.

Some thoughts:

(1) For tax reasons, I prefer to put in writing only who gets how much, and not say anything explicit about how much money is allocated to which type of damages or which claim. I am always uneasy allocating money to lost earnings or lost future earnings. While PI settlements typically are not taxable, I have seen some tax cases in years past that appear to take the position that recovery of lost earnings/lost future earnings means it's taxable as income to the beneficiary. But if it's left as an undifferentiated lump sum without specifically designating specific dollars to lost earnings, it remains untaxed.

(2) The Estate usually should receive as little as possible, in order to make sure settlement proceeds don't become subject to random creditors. Medical bills still end up getting paid from the settlement one way or the other anyway. This is generally easy to justify, as the Estate is only entitled to directly receive compensation for "special damages" related to the PI case anyway, and "general damages" from the PI case plus all wrongful death proceeds go to the statutory beneficiaries outside the probate.

(3) While wrongful death damages are, strictly speaking, measured according to "loss of love care and affection" and strength of the relationship, and are not controlled by inheritance statutes, people emotionally take the inheritance proportions as a baseline, and judges like equal splits. When it's the two parents who are the beneficiaries, if they both had viable, stable, non-abusive relationships with the child, there is little reason to vary from equal division. If both parents arguably had relationships with the child that fell somewhere into a very broad "normal-ish" range, with all the quirks and problems and moments of conflict that includes, then best not to get into an argument about "who loved our dead child the most." I would advise to split it equally unless there was a clear level of estrangement with one parent, not just physical distance.

(4) A parent's financial dependence on the child might alter an otherwise equal division, but in your case maybe not much if it was truly "some financial support" in "the last couple years." That doesn't sound like much reason to vary it, to me. Maybe some small amount relative to the total settlement? But if the "financial support" was more in the nature of occasional gifts to a parent temporarily in need, maybe it shouldn't alter the split.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Andrekita Silva
Sent: Thursday, March 19, 2020 7:43 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] How does one apportion a settlement among beneficiaries in combined 1) survival action and 2) wrongful death


Law Office of
F.ANDREKITA SILVA ...
_________________________________________________________________
1325 Fourth Avenue, Suite 2000                                  Telephone: 206-224-8288
Seattle, Washington  98101                                          www.seattle-silvalaw.com<http://www.seattle-silvalaw.com>

                                                                        March  19, 2020


Listserve,

Can someone give me guidance on the apportionment and/ or distribution of settlement funds from a civil action for both 1) survival claim- for lost future earnings of deceased, etc. and 2) wrongful death, for parents losses, non pecuniary and potentially pecuniary.

The beneficiaries are divorced Mom and Dad, who are in very different positions.

Dad is a foreign national who had good long distance bond, but less involvement during child's life, and received some financial support from adult child in last couple years. Custodial Mom not financially dependent but raised adult son in the U.S. and pretty clearly traumatized by adult son's untimely death.

Since no jury to say what part is 1) lost future wages , 2) emotional/ psychological damages, 3) compensation for lost financial support, etc.

Is there a statute that says how a settlement is apportioned?
Must a neutral be retained to make determination or, can parties decide on their own?  Or does court decide?

The deceased had a good job and

andrekita
Law Office of F. Andrekita Silva
1325 Fourth Avenue, Suite 2000
Seattle, Washington 98101
206-224-8288
www.seattle-silvalaw.com<http://www.seattle-silvalaw.com>



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