How Wrongful Death Settlements Are Divided Among Family Members in Rhode Island
Under Rhode Island law, a wrongful death settlement does not pass through a will. If the deceased leaves behind a spouse and children, R.I. Gen. Laws § 10-7-2 dictates that the spouse automatically receives 50% of the funds, and the children equally share the remaining 50%.
When a family endures the tragic loss of a loved one due to an accident, securing a wrongful death settlement can provide crucial financial relief. However, once the insurance company writes the check, a common question arises: who actually gets the money? Many people mistakenly believe that the deceased person's Last Will and Testament dictates who gets the wrongful death funds. In Rhode Island, this is not true. Wrongful death proceeds are governed strictly by state statute to ensure that the closest dependents are protected.
Understanding exactly how settlements are divided under Rhode Island law helps prevent family conflicts and ensures you know your legal rights. Whether the case is settled out of court or decided by a jury at the Kent County Superior Court, Warwick or the Providence County Superior Court, Providence, the distribution follows a rigid formula. This guide breaks down the statutory rules, exceptions, and how courts protect funds meant for minor children.
Statutory Distribution of Wrongful Death Proceeds
In Rhode Island, R.I. Gen. Laws § 10-7-2 provides a clear, inflexible formula for distributing the damages awarded for the wrongful death itself (the loss of the person's life and income). The division depends entirely on who survives the deceased:
- Spouse and Children: One-half (50%) goes to the surviving spouse, and the other half (50%) is divided equally among the deceased's children.
- Spouse, No Children: If there are no children or descendants, the surviving spouse receives 100% of the wrongful death proceeds.
- Children, No Spouse: If there is no surviving spouse, the children equally share 100% of the funds.
- No Spouse or Children: If the deceased was unmarried and had no children, 100% of the funds go to the deceased's parents.
Wrongful Death Damages vs. Survival Action Damages
It is extremely important to differentiate between a 'wrongful death' claim and a 'survival action.' While wrongful death damages compensate the family for their loss, a survival action (under R.I. Gen. Laws § 10-7-7) compensates the deceased's estate for the medical bills and conscious pain and suffering the victim endured before they died. Survival action damages are paid directly into the deceased's estate, meaning they can be used to pay off the deceased's medical debts, credit cards, and funeral expenses. Any leftover money in the estate is then distributed according to the person's will. Conversely, pure wrongful death funds completely bypass the estate's creditors and go directly to the family.
Splitting Funds with Estranged Spouses
Rhode Island law is very strict regarding the definition of a spouse. Even if the deceased and their spouse were estranged, legally separated, or in the process of getting a divorce, the surviving spouse is still legally entitled to their share under the statute. Unless a final decree of divorce was officially signed by a judge before the death occurred, the estranged spouse will receive 50% of the wrongful death proceeds. This frequently causes friction, but the probate and superior courts are bound by the strict wording of the law.
The Rights of Adopted vs. Stepchildren
Under Rhode Island law, legally adopted children have the exact same rights as biological children and are entitled to an equal share of the children's 50% portion. However, stepchildren do not have automatic rights to a wrongful death settlement. Even if the deceased raised a stepchild from birth and supported them entirely, the stepchild cannot receive a portion of the wrongful death statute distribution unless the deceased legally adopted them.
Protecting Settlement Funds for Minors Using Court-Approved Trusts
If a portion of the settlement belongs to a minor child (under age 18), the insurance company will not simply hand a check to the surviving parent. To protect the child's assets, the court requires the funds to be placed into a restricted account or a court-approved trust. You will likely need to submit Form PC-7.1, Rhode Island, Probate Court, Account to show the probate court exactly how much money the child is receiving. These funds typically cannot be touched until the child turns 18, unless the surviving parent petitions the court and proves the money is urgently needed for the child's direct medical care or education.
How Much Does the Process Cost?
Distributing the funds correctly involves legal and administrative steps:
- Attorney Fees: The wrongful death attorney takes their contingency fee (usually 33% to 40%) off the top of the total settlement before the funds are divided among the family.
- Trust Setup Fees: If a trust needs to be established for minor children, an estate planning attorney might charge $1,500 to $3,000 to draft the trust documents.
- Probate Accounting: Closing the estate and filing the final accounting forms generally involves minor court fees of $50 to $150.
How Long Does the Process Take?
Once the insurance company agrees to a settlement or a jury delivers a verdict, it typically takes 30 to 60 days to receive the settlement check. The attorney will deposit the funds into an escrow account, pay off any applicable medical liens or attorney fees, and then distribute the remaining funds to the family. If the court needs to approve a minor's trust, this can add an extra 4 to 8 weeks to the final payout process.
Frequently Asked Questions (FAQ)
Can a will override the wrongful death distribution statute?
No. A Last Will and Testament only controls assets that belong to the estate. Wrongful death damages compensate the surviving family members directly, so the distribution mandated by R.I. Gen. Laws § 10-7-2 overrides any instructions in the will.
Can creditors take my wrongful death settlement?
Generally, no. Wrongful death proceeds distributed directly to the family under the statute are protected from the deceased person's creditors. However, damages recovered under a survival action (for pre-death pain and suffering) are placed into the estate and can be used to pay the deceased's debts.
Do siblings have a right to the settlement?
Siblings are only entitled to wrongful death proceeds if the deceased had no surviving spouse, no children, and no surviving parents. If those immediate family members exist, siblings receive nothing under the statute.
Do I have to pay income tax on a wrongful death settlement?
Generally, the IRS considers wrongful death settlements that compensate for physical injury and death to be non-taxable. However, any portion of the settlement designated specifically for punitive damages may be subject to federal income tax.
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