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Here's the situation:

2 people were killed in a motorcycle accident, they were riding the motorcycle when an SUV hit them head on. The SUV driver was clearly at fault and their insurance is paying the wrongful death claim.

The motorcycle riders were not married, one of them has 2 children, the other has one child, all of the children are minors.

How should the wrongful death settlement be divided? Is there any general rule about this?

Each person will sue separately in behalf of the deceased. The children of deceased 1 will sue and in a separate lawsuit, the children of deceased 2 will sue for the wrongful death, pain and suffering. The motorcycle passenger may also sue the driver of the motorcycle in an attempt to get more $ in the settlement. The passenger is completely blameless in this situation.

These are just legal tactics and no one is saying the driver of the motorcycle is at fault or to blame for the accident.

It might be helpful to have one attorney represent both parties / families.

Make sure the settlement funds are put into a trust for the benefit of the children. I have seen too many of these lawsuits where the guardian gets the $ and the children get no benefit or college fund b/c the guardian spent the money on themselves.

My brother in law was orphaned. Lived with his aunt. At the age of 18 was kicked out of the house b/c the social security money ran out (stops at age 18). Protect those kids.

[This message edited by The1stWife at 8:48 PM, Friday, September 29th]

Make sure the settlement funds are put into a trust for the benefit of the children. I have seen too many of these lawsuits where the guardian gets the $ and the children get no benefit or college fund b/c the guardian spent the money on themselves

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This 100% my best friends dad was killed by a drunk driver at 15 and her brother was 17. Momma ran through the funds from the settlement life insurance and all before both kids were out of high school. Now the youngest my friend was never college bound but it sure would have been nice to start into adulthood with some funds. She went to trade school and has done well in life but still. College wasn't even an option should she wanted it.

That said I would imagine the riders family would fight for and hopefully get the larger sum.

The insurance company has already agreed to the settlement. It just needs to be split between the claims of the 2 deceased parties.

I am curious to know if it should be split 2 ways, equal portions for each rider, or 3 ways, equal portions for each child?

In my heart I would hope that it could be divided three ways. Because the children are who need to be considered.

But I am concerned that perhaps the law will address it from the perspective of there being two riders on the motorcycle. I guess I can see that perspective as well.

I have no expertise.

My opinion would be that 50% of the money should go to the survivors of one victim and 50% to the survivors of the other victim. I would think the money would get awarded to the victims and then split between their survivors.

If one victim had 12 survivors and the other had one it would not seem fair to the one to have to split it thirteen ways.

I can see an argument for doing it either way.

Was there an attorney involved in this lawsuit or are you settling directly with the insurance company?

Are they offering policy limits for each deceased? If the insurance policy was for $500,000 - is each of the two estates getting $500k or is the insurance company giving only $500,000 to be split?

If it’s the second option you are being cheated. I did this for a living for 10 years and you may be settling for much less $ than you are entitled to.

Get an attorney to review this for you.

When the insurance company wants to settle quickly it means they are looking to pay less to the estate/survivors than they would pay if there was a lawsuit. Once you settle the case is closed.

I second or third or fourth the suggestion of having an attorney go over all the documents and facts in this issue.

In my neck of the woods the division would be relatively clear:
If the payment of 500k was for both then it would be divided by 2 and then divided between the beneficiaries: The deceased with one child would leave that child 250k, the deceased with 2 kids would leave each with 125k.

Seriously look into legal advice…
This short story perfectly describes how I think insurance works:
About a decade ago a good friend of mine had a stroke that left him temporarily partially paralyzed. When I talked to him shortly after the stroke he told me that financially he was fine because he had insurance that covered loss of income. I can’t for the life of me recall the fixed amount he was expecting but let’s just say 100k.
I phoned him a week later and he told me the insurance company had declined his claim for some reason – probably that he was only allowed a stroke on business hours or had to give advance notice or whatever… I encouraged him to seek legal advice and gave him the name of an attorney I knew.
About a week later he phoned me to let me know he just received 140k… That was 40k more than he expected. The attorney told him that once he contacted the insurance company and introduced himself as his attorney they offered to pay the 100k. He found the turn-around suspicious, so he demanded a list of ALL insurances my friend had with that company, and it turns out he had another home-owners insurance that covered 50k in medical emergencies like a stroke… One phone call later and one threat of litigation and the insurance company paid 150k.
My friend got 140k, the attorney 10k for what was basically 3 phone-calls and 10 minutes of policy-reading. Money well spent.

Yes, there are attorneys involved, they have looked at all applicable insurances the driver and his family holds.

My first thought was to split the total 2 ways, half for each deceased. That makes sense to me.

My lawyer said that he wanted to propose that we split it 3 ways for the children. Of course my first thought on that is that he wants a bigger paycheck.

I asked my xMIL, whose opinion in this matter means a great deal, and she also said 3-way split.

The driver of the motorcycle was my wxh and the passenger was his girlfriend. He and I share 2 children while his gf has one child.

I want to look out for my own children but I want to do what's right for everyone. I haven't replied to my lawyer because I'm still unsure of what I should do.

Three way splitting seems fair and put in trust for each child. I would honestly find either way acceptable. I’m really sorry for your loss even though you were no longer married. Hugs!

The three children should receive equal amounts and as Tush said, IMPORTANT that money goes into a trust.

Of course it turns out it's not as straight forward as that.

My lawyer submitted the proposal to split the settlement 3 ways. The other lawyer came back with a counter offer to split it 2 ways. I said that's fine, I'm good with that.

Well.

That's not how it works. Because all 3 beneficiaries are minors, the 2 lawyers have to negotiate. But. Then it's going to have to be approved by the court which will appoint a Guardian Ad Litem who will represent the kid's best interest and will ultimately decide how the settlement is split.

So I don't really have a say in anything, but everyone has to go through the motions.

At any rate, it sounds to me like it will be split somewhere between 2 and 3 ways.

If I had only known the whole process and my role in it to begin with, I might have been a little less stressed about it and been able to save my stress for more important things. Like the fact that my children are going to have to appear in the court meeting and probably have to speak. Haven't they been through enough?

It will be very beneficial for the children that a GAL has been appointed. Be prepared for her to fight to have some if not most of the money placed in a trust for the children, to protect them.

Way too much background info required to be able to suggest what would be correct.
However… I’m not surprised about the two-way split. The compensation is for the lives, and both are deemed equally valuable. The total amount is for two lives, not three dependents.
I would however think the insurance company would/should pay each party directly as separate settlements, and therefore the insurance company "decide" the division. The big difference being that once a couple marry there is a legal entwinement, and all the offspring of the union are a "unit". In this instance there is no marriage, and therefore no formal union.

It’s like if it had been a bus with 30 random people on-board and everyone died, the insurance wouldn’t pay the attorney for the driver all the compensation to divide between the group, but pay each entity to the settlement. I’m surprised that there is one payment, and then your task to argue the division.

Regarding the trust and the guardianship: There is a reason for this, and it can be a very valid argument. Many examples of parents burning through a child’s inheritance or fortune for things that are not relevant to the child, like your child needs an education more than it needs an all-expenses paid family trip to Disney paid with the inheritance. However, be careful that the money isn’t placed into an account that has negative growth due to inflation.

There is generally a correlation between risk and reward: A "safe" investment usually has very low reward. The legal system has a tendency to correctly assume they are not allowed any risk with a minor’s funds, and therefore tie up the money in a low-risk/low yielding savings account. With 3-4% inflation, any account with interest under that is losing value with time.
Since the division of the amount isn’t really in your hands anymore then I would be looking (possibly with your attorney) on how you could possibly place this money into something that is more beneficial to your kids than a fund that has negative growth and legal fees for each and every transaction (if you need to apply to a third-party guardian assigned by the court). Like maybe separate college funds, or that the trust invests in a reputable mixed-growth fund rather than some savings account. I have heard that judges can take a kind view to a plan put before them by the guardian that shows thought and consideration and meets their standards for safety.

I also want to make one important suggestion:
Think carefully about rules regarding when and how the funds can be accessed by the kids… Like don’t let age of maturity suffice. In my neck of the woods that would be 18, and at that age getting a new PS5 or a new Fender guitar might be more important than an education or a house… No matter how you store the money, tie it’s withdrawal to certain milestones like paying for an education, house or a higher age (25 instead of 18). Your kids will do fine driving your old Hyundai when they reach 16 (so no dipping into dad’s inheritance for a BMW), but will do even better finishing an education with no loans.

The way my lawyer explained the argument over the split of the settlement is the value of the claims (for 3 beneficiaries) vs. the number of claims (for 2 decedents).

Thank you for the financial advice and pointers, Bigger. I have an appointment later today to meet with a financial advisor so this will help give me some direction.

Again, I don't know how much of a say I have in anything, including how my kids get this money, but at least I can talk to my lawyer again with a little more knowledge and I can better understand the outcome of all of this.

Jeaniegirl, I do get the involvement of the courts and the GAL, that it's a good thing. Just wish the lawyer would have explained things on my level to begin with.

Deena04, thank you