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What's A Parent Worth?

After reading last month’s newsletter about the valuation of homemaker services, several clients have asked me: “Okay Frank, how do you quantify and fund a claim for loss of parental guidance?”

Talk about a loaded question! Our very society is built around the family unit with one or both of the parents standing as the foundation which supports the whole family. The loss of a parent can - and often does - wreak havoc on the lives of children regardless of their age. How can we possibly put a price on a parent’s importance to their children? It’s not easy. But our business requires that tough issues like this be faced squarely and handled well.

Some parents are better than others (indeed some reside in jail). But does that mean we can (or should) quantify a child’s loss based upon the quality of guidance or nurturing the parent actually provided? Some believe that emotional testimony regarding the type of parent a decedent was is the best way to quantify the loss. And remember, parental guidance itself might not be limited to just the years of minority; after all, when does someone stop needing their mother?

Others believe that the loss of parental guidance, no matter how emotional, still represents a simple economic equation like the homemaker we examined last month. For example, if the parent tutored the child each night, drove her to school each day, counseled her with respect to her relationships, coached her golf lessons and taught her bible studies at night, you might just ask an economist to quantify those services. You could have them project the costs of a daily tutor, a chauffeur, a social worker, golf instructor and appropriate offering to a church. However, even approached this way, the loss could grow into a substantial sum over the course of a child's minority.

As you can see, establishing a monetary value for the lost nurture, care, and guidance of a deceased parent is inherently problematic. As with pain and suffering, there are no precise and detailed guidelines for fixing an amount which represents the pecuniary value of a child's loss of parental guidance. Thus, it is instructive and appropriate to look to comparable cases to determine what has previously been found to represent reasonable compensation.

Recent decisions by the New York Appellate Division, Second Department, may offer some guidance. On October 20, 2009, the court affirmed a verdict in Segal v. City of New York which awarded $250,000 for past loss of parental guidance and $200,000 for future loss of parental guidance in favor of one plaintiff and the sum of $200,000 for past loss of parental guidance by another.(2)

On January 24, 2012 the court affirmed a verdict in Vasquez v. County of Nassau which provided $100,000 for 6.5 years of past loss of parental care and guidance and $600,000 for 55 years of future loss to the surviving disabled infant. If we discount this down in accordance with New York law (CPLR article 50-(B)), the present value of the $600,000 future loss would equal $496,914.(3) Further research of comparable cases in other jurisdictions might yield averages both higher and lower than these. As all professionals in this field know, measuring only the cases which go to verdict may not be the best test because the majority of these types of cases settle and would not be reflected in your analysis.

Since the loss of a parent is admittedly a devastating event and because there is no one “right way” to value this loss, I take a practical approach: I begin by crafting at least one good future outcome for the child and build out from there. A fully-funded college education is often a good place to start. We recently resolved such a case involving a child born in June of 2001 who lost his mother at age 2 with the following plan:

                                                                                                   Guaranteed                  Cost
Education Fund Ages 18 – 22 Payout
$50,000 per year for 5 years certain, payments
Commence at age 18.                                                             $250,000

Monthly Stipend while in school 18 - 22
$500 per month for 5 years certain, payments
Commence at age 18.                                                               $30,000

Post Graduate Income
$1,000 per month for 10 years certain, payments
Commence at age 25.                                                             $120,000

Total Payout                                                                               $400,000                 $290,647

No amount of money can come close to replacing a parent, but this child will now have access to an education that their parent might never have dreamed possible.

Do you have a case involving loss of parental guidance as a component of damages? Do you need help calculating an acceptable value for that loss? Call Frank C. Kilcoyne, CSSC at 800-544-5533, I am here to help.

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(1) "Proving Damages in a Wrongful Death Case," see http://www.gairgair.com/lawyer-attorney-1443618.html

(2) http://law.justia.com/cases/new-york/appellate-division-second-department/2009/2009-07613.html

(3) http://www.newyorkinjurycasesblog.com/tags/loss-of-parental-guidance