At the Probate ProSM, we often deal with wrongful death cases. The wrongful death act is highly detailed and there’s a lot to digest. While there is much that can be covered when it comes to the act, we thought we’d focus on the questions and concerns we encounter the most. These relate to the distribution of the funds when a settlement is reached (or less often, a judgment obtained). To impart a little bit of knowledge, let’s go over these frequently asked questions, one by one.
I have settled a wrongful death lawsuit, what’s next?
The wrongful death act (MCL 600.2992) has specific procedures to follow when a suit is settled. The act’s language pertaining to court approval of the settlement itself is actually optional (the court “may, with or without notice”, approve the settlement). However, the provisions applicable to distribution of the proceeds are mandatory.
I didn’t file suit, the insurance company just tendered the policy limit (or we settled through pre-suit facilitation), do I still have to follow the wrongful death procedures?
Yes, MCL 600.2921 states all actions and claims survive death. “Actions on claims for injuries which result in death shall not be prosecuted after the death of the injured person except pursuant to the next section. If an action is pending at the time of death the claims may be amended to bring it under the next section. A failure to so amend will amount to a waiver of the claim for additional damages resulting from death.” The next section, MCL 600.2922 states, that if no suit is pending, the procedures of MCL 700.3924 located within the Estates and Protected Individual’s Code must be followed. MCL 700.3924 is nearly identical to MCL 600.2922, but tailored to probate court.
Shouldn’t the probate court decide who gets the proceeds?
If a lawsuit is filed in circuit or federal court, the distribution must be overseen by that judge. Because of this, it cannot be decided by the probate court. If no suit has been filed, then the probate court should decide the distribution.
But what does following the wrongful death act mean?
In relation to the distribution of the proceeds, when a suit settles or a judgment is obtained, a motion must be filed for the court to determine the proper distribution of the proceeds. The claimants must be sent a particular notice of their rights to make a claim and they have to be served in accordance with the probate rules.
Who are the claimants? Why doesn’t the spouse get it all?
In Michigan, the claimants consist of a broad class. They include not just the usual suspects of spouse and children but also parents, grandparents, grandchildren, siblings, step children, and will devisees. This is usually surprising to people. We are often told a relative hadn’t talked to the decedent for years. It is hard to understand why this person should get notice of the settlement let alone be able to make a claim to the proceeds. But, the standard for awarding damages (discussed below) should weed these people out if they really didn’t have a relationship with the decedent. That doesn’t necessarily mean they won’t try to seek damages which can cause prolonged and expensive litigation.
But, grandma died after decedent so I don’t have to give her notice, right?
Technically, the act defines those that “survive” the decedent as wrongful death claimants. This means grandma’s estate could technically make a claim and her personal representative (if appointed) or her heirs need to be served with notice.
What is a wrongful death claim based on?
Generally, a claimant can assert entitlement to damages for loss of “society and companionship” and loss of “support.” Support usually pertains to a child but arguably could apply to a young adult still being supported or an otherwise dependent adult. Society and companionship essentially translates to the actual everyday relationship that person had with the decedent (not relationship in terms of kinship but in terms of a bond). If the distribution is decided correctly, a person that had no relationship with the decedent is unlikely to get much, if anything. But, the standards for receiving damages means that the spouse or children are not automatically entitled to everything. Spouses can have other individual claims usually made in the lawsuit itself.
What is a GAL and why is this person involved?
If any wrongful death claimants are minors or incapacitated individuals, who do not already have a fiduciary in place, the act requires that a “Guardian ad Litem” be appointed to assess whether the proposed distribution (or lack thereof) is fair to them. This makes sense as these people cannot legally speak for themselves. For minors, often their parents are claimants too. Sometimes clients do not understand why a stranger gets a say in the matter nor do they appreciate the extra fees involved. But, following the rules makes it certain any final decision is not reversable.
Why is this money not payable to the decedent’s estate?
It could be if the decedent experienced conscious pain and suffering before dying. The act makes provision for allocation to the estate for such damages. If the court were to award these damages they would be paid to the decedent’s estate and distributed pursuant to the intestate laws. Often, the same persons will end up receiving the proceeds whether or not a portion is paid to the decedent’s estate.
Do any creditors of the decedent have a claim to the proceeds?
Yes, if the claim falls within specific classes. The act states that the proceeds “shall” be used to pay medical, hospital and funeral expenses “for which the estate is liable.” There are two major takeaways from this language. The first is that arguably if a creditor did not file a claim within the estate (assuming appropriate notice was given), they are not entitled to payment even if the creditor fits within the medical or funeral category. This stance would not apply to a valid lien on the proceeds which should always be paid. Secondly, no other types of claims are entitled to payment.