Detailed Answer
This guide explains, in plain language, how to make sure a wrongful death settlement in California is filed correctly with the court and that the settlement funds are split exactly as the parties agreed. This is general information only and not legal advice. For questions about your specific case, consult an attorney.
Key legal reference
California recognizes wrongful death actions under the Code of Civil Procedure. See California Code of Civil Procedure §377.60 for the wrongful death cause of action: CCP §377.60.
Overview — what must happen to finalize and distribute a wrongful death settlement
- Put the deal in writing. The parties (plaintiffs, defendants/insurer) should sign a clear settlement agreement that states the total payment, method of payment (lump sum or structured), timing, and exactly how the net proceeds will be split among the beneficiaries. The agreement should identify who will pay liens, costs, attorney fees, and who will receive what portion of the net recovery.
- Resolve liens and subrogation claims before distribution. Health-care providers, hospitals, Medi‑Cal, Medicare, lien holders, and insurers may assert reimbursement or subrogation rights. Confirm the amounts and get agreements (written) about how each lien will be paid. Unpaid liens can delay court approval and distribution or result in personal liability.
- Determine whether court approval is required. If any beneficiary is a minor, legally incompetent, or otherwise under a disability, California courts commonly require a petition to approve the compromise and a court order before funds can be disbursed. Even where all adults are competent, the parties often file a proposed judgment or stipulation so the court can enter dismissal and, if requested, a distribution order.
- Prepare the necessary court papers. Typical filings include:
- The written settlement agreement (filed or lodged under seal where confidentiality is requested, if local rules permit).
- A proposed order or judgment approving settlement and directing distribution (if the court must approve or if the parties want the court to document the agreed split).
- A dismissal form (to conclude the litigation) once the court has approved or when the parties have completed the settlement steps.
- File a petition and notice if required. When minors or conservatees are involved, file the petition to approve the compromise in the appropriate court (civil or probate, depending on local practice). Serve notice to all interested parties according to court rules so they can object. Many counties have local rules and mandatory Judicial Council forms for such petitions.
- Obtain a court order that authorizes or confirms the split. A court order approving the settlement and directing distribution gives clear authority for the payer (insurer/defendant) and escrow agent to distribute funds exactly as ordered. If the court issues such an order, follow it strictly when disbursing funds.
- Use an escrow or blocked account where appropriate. For minors or when parties want extra protection, deposit settlement proceeds into a blocked account, structured settlement annuity, or court‑supervised account. The account terms should reflect the agreed split and court order requirements.
- Get signed releases and receipts at distribution. Each beneficiary should sign a receipt and release confirming they received their agreed share. Keep originals in the case file and give copies to the insurer/escrow agent.
- Close the case. After funds disburse, file a notice of dismissal or a satisfaction of judgment as required by the court rules. Record any required documents to show the case is closed.
Practical step‑by‑step checklist for ensuring the split matches the agreement
- 1) Insist on a written settlement agreement that itemizes gross payment, attorney fees, costs, liens, and each beneficiary’s net share.
- 2) Ask the insurer or payer for a written payment schedule and a wiring/escrow instruction showing payee names and amounts.
- 3) Confirm lien payoffs in writing and require lien holders to provide release or lien‑satisfaction documents that will be executed on payment.
- 4) If minors/conservatees are involved, file the petition to approve compromise and obtain a court order before distribution.
- 5) Use an escrow agent or the court to hold funds until all conditions (liens, court approval, paperwork) are satisfied.
- 6) Before disbursing, reconcile the ledger: gross recovery, subtract legal fees (supported by fee agreement and invoice), subtract costs, subtract lien payoffs, divide remainder per the written split; have all parties sign off.
- 7) Collect signed releases and receipts from each payee and file them with the court docket or keep them in the closing file.
- 8) File a dismissal and any required clerk’s paperwork; obtain and keep the final court order or judgment showing distributions.
Special issues to watch for
- Attorney fees and fee-splitting: Confirm whether attorney fees are deducted before or after the agreed split. The settlement agreement should clearly state this. California has rules on contingency fees and billing disclosures that attorneys must follow.
- Liens and subrogation: Medi‑Cal, Medicare, private health insurers, and lienholders may assert reimbursement rights. Failure to resolve these will complicate distribution and may expose beneficiaries or attorneys to claims.
- Minors and conservatees: Courts protect vulnerable beneficiaries; expect extra paperwork, a hearing, and possible use of special accounts or structured settlements.
- Tax and reporting: Settlement proceeds may have tax implications. Ask your attorney or tax advisor whether any portion is potentially taxable and who will issue 1099 forms.
- Recordkeeping: Keep detailed accounting for every dollar in and out (settlement check, escrow interest, fees paid, lien payoffs, and net distributions).
What to do if the split doesn’t happen as agreed
If a payer or co‑party refuses to distribute as written or as ordered by the court:
- Demand written accounting and copies of the negotiated settlement, the insurer’s payment instructions, and all releases.
- Ask the court to enforce its order if one exists. A party who disobeys a court distribution order may be subject to enforcement remedies including contempt or turnover orders.
- If there is no court order, consider filing an agreed proposed order with the court describing the distribution and asking the court to enter it before funds disburse.
- Preserve evidence (emails, settlement documents, payment records) and consult an attorney about breach of contract or equitable remedies.
Where to find forms and more information
Judicial Council forms and local court self‑help resources explain how to file petitions, proposed orders, and petitions to approve minor compromises. General California court forms are at: https://www.courts.ca.gov/forms.htm.
Helpful Hints
- Always get the settlement agreement in writing and signed by all parties.
- Before you sign anything, make sure the agreement describes exactly who pays liens, fees, and costs and shows the net distribution to each beneficiary.
- Use escrow or a blocked account when parties don’t fully trust one another or when minors are involved.
- Require lienholders to provide written payoff figures and releases in exchange for payment.
- Ask the insurer to make the settlement check payable to escrow or to list each payee in the manner the agreement requires.
- Keep copies of every signed release and every check or wire confirmation; you may need them to prove distribution.
- If you are unsure whether court approval is needed, talk to a civil litigation attorney or your local court self‑help center before accepting or depositing funds.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. It does not create an attorney‑client relationship. Laws change and facts differ from case to case. Consult a licensed California attorney about your specific situation.