Article: How Wrongful Death Statutes Can Kill an Estate Plan: Part 1

Noel Brock (Eastern Michigan University) recently published, How Wrongful Death Statutes Can Kill an Estate Plan: Part 1, 2024. Provided below is an Abstract:

Parents do numerous things for their minor children – both tangible and intangible. Parents provide minor children with food and shelter and do what they can to keep them in good health. They also do all they can to ensure their children are educated. Beyond these tangible things, parents try to pass on their values and teach their children their religious beliefs. When only one parent dies or becomes incapacitated, the surviving parent generally carries on this role. When both parents either die or become incapacitated while their child is still a minor, the child needs a substitute parent. A guardian assumes the responsibilities of the parent in such situations. A minor child guardianship occurs when an adult (the ‘guardian‘) is named by a state court judge to care for an unemancipated minor (the ‘ward‘ or ‘minor child‘) whose parents are unable or unwilling to care for the child. Once appointed, the guardian has the same rights and obligations under the law as a parent.

However, a guardianship of an unemancipated minor does not become effective until the occurrence of some event renders both parents unable to serve as the guardian (usually death or disability of the parents). Thus, it is critical for parents to name a guardian, and perhaps one or more alternative guardians in both their will (in the event of their death) as well as in a durable power of attorney (in the event they become incapacitated while living).

The U.S. Supreme Court has repeatedly held that it has no jurisdiction under the United States Constitution to consider the issue of minor guardianship (essentially making the issue an issue reserved to the States). While each State’s laws vary, they all use the same guiding principle in naming a guardian of a minor child – best interest of the child. When a minor child is left parentless (whether by death or incapacity of both parents), a state court judge decides who will be the guardian of that minor child. If the parent(s) left a will or durable power of attorney that names a preferred guardian, the judge typically gives the parents’ preferences great weight. That said, the judge will always consider the best interest of the child in naming a guardian – even one chosen by the deceased parents – and can override the guardian named in the will or durable power of attorney if the judge deems someone else to be better for the child.

While not legally binding on a court deciding guardianship of a minor child, most estate attorneys advise their clients to name guardians for any minor children upon their death (in a will) or upon their incapacity (in a durable power of attorney). When naming a guardian, parents typically, and rightfully, consider who would be the best person to raise the minor child if they were not here. Parents also typically set up one or more trusts to pass property to for the benefit of a minor child (or minor children). What most parents do not think of, or maybe do not realize, is that there are certain categories of property that pass outside of probate and not pursuant to the will (or pursuant to intestate succession if the parent dies without a will). In some states, for example, wrongful death lawsuit recoveries pass not pursuant to the testator’s will or pursuant to intestate succession laws, but instead pass outside of probate to a list of potential takers decided upon by State legislators. If the parents of minor children die in such a manner to give rise to a wrongful death lawsuit in such a State, any recovery from that lawsuit will not pass pursuant to the testator’s will or pursuant to State law intestate succession. Instead, a state court judge or jury will ultimately decide who among the potential takers will receive part or all of the wrongful death recovery. Moreover, and importantly, the guardian(s) of the minor children will be responsible for overseeing those monies until the minor children reach the age of majority.