Who is eligible to receive settlement funds when a child dies in a wheelchair accident? – North Carolina

Short Answer

In North Carolina, wrongful death settlement funds are paid to the child’s legal heirs, not to the estate or general creditors. After allowable expenses and any required lien repayments, the balance is distributed under North Carolina’s intestacy rules—typically to the surviving parent(s), subject to bars like abandonment or lack of legal paternity. A court‑appointed personal representative must handle the settlement and distribution, and a judge usually must approve the settlement unless all adult beneficiaries consent in writing.

Understanding the Problem

North Carolina: who can receive wrongful death settlement funds; role of the personal representative; and whether parents or someone else are legally entitled to the proceeds when a minor child is killed in a vehicle incident. The key decision point is whether the law directs payment to specific heirs and what approvals are required before any insurer can release funds.

Apply the Law

Under North Carolina law, only a duly appointed personal representative (administrator) may settle a wrongful death claim for the decedent, and settlement proceeds are not general estate assets. After paying permitted items (burial and certain medical expenses, and resolving any statutory liens), the remaining funds pass directly to the heirs according to intestacy—not under a will. For a deceased child with no spouse or descendants, the heirs are usually the surviving parent(s), subject to disqualification rules (e.g., abandonment, slayer) and proof of legal parentage.

Key Requirements

• Personal representative is required: Only a court‑appointed administrator can settle and receive wrongful death funds; insurers should not disburse to individuals directly.
• Judicial approval/consent: A judge must approve the settlement unless every adult person entitled to share in the recovery consents in writing.
• Pay allowed expenses and liens first: Burial expenses may be paid; injury‑related medical bills are capped by statute (with a percentage limit after attorney fees). Federal/state healthcare liens (e.g., Medicare; possible Medicaid/State Health Plan) may apply and can supersede caps.
• Distribute by intestacy: The balance is divided under North Carolina intestacy law, which for a child typically means equal shares to surviving parent(s), unless a parent is legally barred or paternity has not been established.
• Proceeds bypass creditors: Wrongful death proceeds are not estate assets and generally are not available to pay the decedent’s or estate’s ordinary debts.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-18-2 (Wrongful death) – Defines recoverable damages, medical/burial limits, and directs distribution under intestacy.
• North Carolina Gen. Stat. § 28A-13-3 (Powers of personal representative) – Authorizes compromise/settlement and addresses approval/consent.
• North Carolina Gen. Stat. § 29-15 (Order of intestate succession) – Sets who inherits when there is no will.
• North Carolina Gen. Stat. § 31A-2 (Parental bars) – Bars a parent who abandoned the child from inheriting from the child.

Analysis

Apply the Rule to the Facts: Because the child died from injuries in a wheelchair accident and the insurer holds settlement funds, an administrator must first be appointed to settle and receive the funds. The settlement generally needs judicial approval unless each adult heir consents. From the proceeds, the administrator may pay burial and limited injury‑related medical expenses and must resolve any Medicare/Medicaid or State Health Plan lien. The remaining balance is distributed under intestacy—typically to surviving parent(s), unless a parent is legally barred or paternity is not established.

Process & Timing

1. Who files: A parent or other qualified person. Where: Clerk of Superior Court in the North Carolina county of the child’s domicile. What: Apply for Letters of Administration using the Administrative Office of the Courts form (AOC‑E‑202). If the estate exists only to pursue wrongful death, the clerk may use stand‑alone wrongful‑death forms. When: Start promptly; wrongful death claims in North Carolina generally must be brought within two years of death.
2. Settlement approval and liens: The administrator negotiates with the insurer and seeks court approval of the settlement (or obtains written consents from all competent adult beneficiaries). The administrator allocates and pays allowed burial/medical charges within statutory limits and resolves any lien claims. Timeframes vary by county and lienholder response.
3. Distribution and closing: The administrator distributes the net proceeds to eligible heirs under intestacy, obtains receipts/releases, files a separate wrongful‑death accounting if required by the clerk, and then closes the estate proceeding when all duties are complete.

Exceptions & Pitfalls

• Parental bars and paternity: A parent who abandoned the child may be barred from inheriting. If paternity was never legally established, a purported father may not share.
• Slayer and survival issues: A person who unlawfully caused the death cannot inherit. Survivorship timing rules can affect who qualifies as an heir.
• Paying the wrong parties: Insurers should not pay individuals directly without an administrator and required court approval/consents.
• Expense caps and liens: Do not exceed the statutory cap on injury‑related medical expenses; address Medicare/Medicaid/State Health Plan liens before distribution.
• Creditor mix‑ups: Wrongful death proceeds are not general estate assets and typically do not pay ordinary creditors.
• Accounting: Keep wrongful death proceeds separate from estate assets and be prepared to file a dedicated wrongful‑death accounting if the clerk requires it.

Talk to a Wrongful Death Attorney

If you’re dealing with who should receive wrongful death settlement funds after a child’s death, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.