A Review of Matter of Kaiser, the “Emperor” of Wrongful Death Settlement Proceeds
One of the first tidbits learned in law school is that there are three certainties in life: death, taxes, and litigation. This legal briefing touches two of those topics: death and litigation. Death is difficult to deal with in general, but even more so when it happens unexpectedly to a young spouse and parent due to the negligent actions of another individual. Litigation almost always follows this type of tragic death as the young family is scrambling to not only deal with the unexpected loss of a loved one, but to replace the significant financial loss caused by that untimely death. How are the settlement proceeds of a wrongful death case divided amongst the surviving spouse and the minor children of the decedent? The answer to this question may surprise some people.
The word “Kaiser” is the German word for “Emperor”, which seems fitting when discussing a wrongful death case from 1950 that occurred in Kings County, New York, Matter of Kaiser. The holding in Kaiser often rules the day when discussing how to distribute wrongful death settlement proceeds amongst a widow/widower and the minor children of a decedent. The Kaiser decision sets forth a mathematical formula to address this very difficult issue, the result of which can often appear unjust to a neutral observer.
New York courts consider the spouse’s and the minor children’s respective dependencies on the decedent as well as the ages of the surviving family members and the respective number of years the spouse and each child could reasonably expect financial support from the decedent. Let’s put some real numbers to this calculation by assuming that a husband/father was 27 years of age at the time of his untimely death leaving behind a wife (age 25) and two children (ages 7 and 1). According to Kaiser, it is assumed that the decedent’s wife could reasonably anticipate relying financially upon her husband for the remainder of his life (by applicable life-expectancy tables, it is assumed that this period of time would be an additional 48 years); however, with regard to the minor children, the Kaiser decision sets an initial limit on each child’s reasonable anticipation of financial dependence until each child turns 21 years of age. The initial Kaiser calculation looks like this:
Now that the percentages of recovery for each family member are established using the Kaiser formula, assume that the wrongful death proceeds (after legal fees and costs are paid) amount to $425,000. The decedent’s wife shall receive $248,625 of the settlement proceeds; Child No. 1 (the 7-year old) shall receive $72,675 of the settlement proceeds; and Child No. 2 (the 1-year old) shall receive $103,700 of the settlement proceeds. Here, we have two young children (both of whom lost their father and the parental guidance and care he would have provided for the rest of their lives), and the Kaiser formula provides that the younger child shall receive approximately $30,000 more than the older child. In most cases, this Kaiser calculation would rule the day and become the final settlement calculations approved by the Surrogate’s Court determining this wrongful death proceeds allocation issue.
Many people interpret this outcome as “unfair” to the 7-year old child since this child lost just as much of the father as the 1-year old child did (and it is often assumed that the surviving spouse of the decedent/mother of the two young children will use her portion of the settlement proceeds to take care of the children). As a result, many people believe that the children in this scenario should receive an equal amount from the settlement proceeds. With these thoughts in mind, why does the 1-year old get so much more of the settlement than the older sibling? The wrongful death statute and the Kaiser decision view this scenario differently because the claim for wrongful death is largely an attempt to allow the surviving family members to recoup their respective financial loss due to the untimely death. Thus, the 7-year old child who could only reasonably anticipate depending financially on the decedent father for another 14 years certainly should receive much less than his or her 1-year old sibling who could have reasonably anticipated depending financially on the father for another 20 years. Notably, some cases do merit and allow for the variation from the Kaiser formula (for example, where it can be demonstrated that one or more of the children suffer from an illness or injury that would have made them more dependent on the parent for a period of time past their 21st birthday).
In the unfortunate event that a family is dealing with the tragic and untimely death of a family member due to the negligent actions or omissions of another individual, that family should retain a lawyer that understands the “Emperor” that dictates the outcome of wrongful death cases, Matter of Kaiser.
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