Short Answer

Yes. In North Carolina, wrongful death proceeds are not estate assets and do not pass under the will. After paying limited, statutorily allowed expenses and liens, the balance must be distributed to the decedent’s heirs under the Intestate Succession Act, regardless of what the will says. A judge typically must approve the settlement unless all adult heirs entitled to share consent in writing.

Understanding the Problem

You are the North Carolina executor and expect a settlement on a military JAG wrongful death claim your late spouse started. The will leaves specific gifts to children and a grandchild and the residue to you. Your question is narrow: must you distribute the wrongful death proceeds by intestate succession instead of following the will?

Apply the Law

Under North Carolina law, only the personal representative (executor or administrator) can pursue and settle a wrongful death claim. Wrongful death proceeds are not part of the probate estate. By statute, they are first applied to litigation expenses and attorney’s fees, then to certain medical and burial expenses within limits, and the remaining balance must be distributed to the decedent’s heirs under the Intestate Succession Act—not to the will’s beneficiaries. The court generally must approve a settlement unless all competent adult heirs who will receive the funds consent in writing. The Clerk of Superior Court can require a separate accounting of wrongful death funds and will review and approve claims for medical and burial expenses. Do not commingle these proceeds with regular estate assets.

Key Requirements

• Proper party: The personal representative prosecutes and settles the wrongful death claim; others lack standing.
• Allocation order: Reimburse case expenses, then attorney’s fees, then pay approved burial costs and limited medical/hospital bills tied to the injury.
• Heir-based distribution: Distribute the net balance to heirs under intestacy rules, not under the will.
• Court oversight: Obtain judge approval of settlements unless all competent adult heirs consent; the clerk reviews and approves medical/burial claims and can require a separate accounting.
• No commingling: Keep wrongful death funds separate from regular estate assets; they are not subject to most estate creditors.
• Liens: Resolve Medicare (and possible Medicaid/State Health Plan) reimbursement rights even if medical caps would otherwise apply.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-18-2 (Wrongful death damages) – Who brings the claim, allowable expenses, and distribution to heirs.
• North Carolina Gen. Stat. § 28A-13-3 (Powers of personal representative) – Authority to compromise or settle claims, including wrongful death.
• North Carolina Gen. Stat. § 29-14 (Intestate share of surviving spouse) – Sets the spouse’s share when distributing under intestacy.
• North Carolina Gen. Stat. § 29-15 (Shares of other heirs) – Identifies the classes of heirs who take if not the spouse.

Analysis

Apply the Rule to the Facts: As executor, you may settle the JAG wrongful death claim, but the proceeds are not estate assets and do not follow the will’s gifts or residue. After reimbursing litigation expenses and paying attorney’s fees, you must handle burial and qualifying medical bills as allowed, then distribute the remaining funds to the heirs under intestacy (for example, shares to the surviving spouse and lineal descendants per statute). Because minors are among those named in the will, if any intestate heirs are minors or if all adult heirs do not consent, seek a judge’s approval before distribution and follow any directions for handling minors’ shares.

Process & Timing

1. Who files: The personal representative. Where: Seek settlement approval from a district or superior court judge (if required), and report to the Clerk of Superior Court for accounting. What: Motion/petition for approval of wrongful death settlement with proposed allocation; submit claims for burial/medical expenses for clerk review; maintain a separate wrongful-death accounting. When: Obtain court approval (if required) and resolve liens before any distribution.
2. After approval, reimburse estate case expenses and attorney’s fees, then pay clerk-approved burial and qualifying medical bills; resolve Medicare/Medicaid/State Health Plan liens. County practices vary on documentation and confidentiality of settlement amounts.
3. Distribute the remaining proceeds to intestate heirs per Chapter 29; handle minors’ shares through approved methods (e.g., deposit with the clerk or UTMA/custodial arrangements as permitted); file receipts/releases and the separate wrongful-death accounting with the clerk.

Exceptions & Pitfalls

• Do not distribute under the will; wrongful death proceeds must follow intestacy even if the will says otherwise.
• Do not commingle funds; maintain a separate account and separate accounting for wrongful death proceeds.
• Medical expense payments are limited by statute, but Medicare (and often Medicaid/State Health Plan) reimbursement can exceed those caps and must be addressed.
• If any intestate heir is a minor or incompetent, expect court approval and specific directions for holding or distributing that share.
• If there are no heirs under intestacy, a wrongful death claim may not be available.
• If the wrongful death claim is the only estate asset, general notice to creditors is typically not required; confirm before publishing.

Conclusion

In North Carolina, wrongful death proceeds are not probate assets and must be distributed to heirs under the Intestate Succession Act after paying authorized litigation costs, attorney’s fees, and limited medical and burial expenses. The will does not control the net distribution. As executor, your next step is to obtain any required court approval of the settlement, resolve liens, keep funds separate from estate assets, and then distribute the balance to intestate heirs per Chapter 29.

Talk to a Probate Attorney

If you’re dealing with a wrongful death settlement and want to be sure distributions follow North Carolina’s rules, 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.