Who Gets My Death Benefits?
By: Rita B. Dorry
In compensable worker’s compensation death cases, how do we decide appropriate beneficiaries? This answer can get a little sticky in an age where we have a significant increase in the number of divorces with a one (1) year separation period, illegitimate children, long-term live-in partners[1], students moving back home to live with their parents, stepchildren, as well as movement across state lines between spouses and children. But, N.C. Gen. Stat. §§ 97-38 through -40 and case law offer some guidance for determining the appropriate beneficiaries.
First takers: those who are wholly dependent.
The Workers' Compensation Act provides that if death results proximately from the covered accident weekly payments of compensation shall be paid to the person or persons entitled thereto first to persons wholly dependent for support upon the earnings of the deceased employee at the time of the accident shall be entitled to receive the entire compensation payable share and share alike to the exclusion of all other persons. N.C. Gen. Stat. § 97-38. A claimant may be found "wholly dependent" by two distinct avenues. First, a claimant may be factually determined to be "wholly dependent" when that person subsists entirely on the earnings of the decedent worker. The claimant is "wholly dependent" even though occasionally receiving gratuitous services, or financial assistance, or other minor considerations or benefits which do not substantially modify or change the general rule.
N.C. Gen. Stat. § 97-39 provides that a widow, widower and/or child are conclusively presumed to be wholly dependent for support upon the deceased employee, and that in all other cases of dependency, in whole or in part shall be determined by the specific facts of each case. The term "child" is defined by the Workers' Compensation Act as including a: Stepchild or acknowledged illegitimate child dependent upon the deceased, but does not include married children unless wholly dependent upon him. "Child" include(s) only persons who at the time of the death of the deceased employee are under 18 years of age. N.C. Gen. Stat. § 97-2(12).
Stepchildren who are substantially but not legally dependent upon a stepparent can receive death benefits under the Workers' Compensation Act, at N.C. Gen. Stat. § 97-39. There is no minimum percentage or mathematical certainty required to determine substantial dependency of a stepchild. Rather, courts determine substantial dependency under the facts of each case by considering the amount and consistency of support a stepchild receives from (1) the deceased stepparent, (2) the natural parent married to the stepparent, (3) the estranged natural parent, whether such support is voluntary or required by law, (4) the income of the stepchild, and (5) any other funds regularly received for the support of the stepchild.
A person can qualify as a widow in one of three ways: the decedent's wife (1) living with or (2) dependent for support on him at the time of his death; or (3) living apart for justifiable cause or by reason of his desertion at such time. N.C. Gen. Stat. § 97-39. By using the word "or" before method two, the General Assembly intended that the wife can qualify as a widow if she is actually dependent on decedent whether or not living with him. In method three she qualifies if she is living apart for justifiable cause or desertion, whether or not dependent.
Second takers: those who are partially dependent.
Where there are no wholly dependent beneficiaries, those partially dependent are allowed to take to the exclusion of others and death benefits shall be divided among them according to the relative extent of their dependency. N.C. Gen. Stat. §§ 97-38(1), 39.
Other than the guidance provided by N.C. Gen. Stat. § 97-39, there does not appear to be a standard for determining whether someone is partially dependent upon a deceased employee as each case is decided on the specific facts of the case. In Winstead v. Derreberry, 73 N.C. App. 35, 326 S.E.2d 66 (1985), the Court of Appeals established a “substantial dependency” standard for determining whether someone is wholly dependent upon a deceased employee. In evaluating whether someone is “substantially dependent,” the court examines whether the person “was substantially dependent on the financial support of [the deceased] as compared with all other sources of financial support available to maintain his accustomed standard of living.” The Court in Winstead held that “de minimis amounts irregularly received and used in support of the [recipient] must be excluded from the computation.” Although the Court of Appeals in Winstead did not establish a test for determining partial dependency, it stands to reason that irregularly received de minimis amounts of support should be excluded from consideration.
Third takers: those who are next of kin.
Where the deceased-employee plaintiff has no whole or partial dependents, the Court will next assign benefits to those who are classified as “next of kin” under N.C. Gen. Stat. §97-40. The amount payable to the next of kin shall be commuted to its present value and paid in a lump sum to the next of kin. The statue defines "next of kin" as including only child, father, mother, brother or sister of the deceased employee, including adult children or adult brothers or adult sisters of the deceased. Moreover, the order of priority among the next of kin is governed by the intestate laws of North Carolina. Where one dies without a will in North Carolina, the order of intestate succession will vary depending on whether there are living children, parents, or spouse, and if there are no takers from the first three categories, then to siblings, grandparents, uncles, aunts, cousins, and other similarly situated familial relationships.
When handling death claims, it is imperative to put all potential beneficiaries on proper notice. This can also prove to be a challenge, especially where potential dependents do not have discoverable contact information online or have relocated to another state. Another consideration in death cases is whether any potential dependent beneficiary will require a guardian ad litem appointment by the Commission.
Some claims can be settled pursuant to forms and filings with the Industrial Commission while others may require a dependency hearing before a Deputy Commission with an Opinion and Award to determine the appropriate beneficiaries. The calculation of benefits can also prove challenging based on the date of the award and commuting the present value where appropriate. Each death claim we handle presents its own unique set of facts that will require investigation from one of our experienced attorneys.
[1] North Carolina does not recognize common law marriage. Therefore, a potential beneficiary must show evidence of a legitimate marriage generally by way of a certified marriage certificate.