Mary Faye Craft, the Fairfax County woman who attracted national attention when she was acquitted of murder in the death of her fifth husband, has settled out of court a wrongful death suit filed by the children of the retired U.S. Air Force general.

As part of the settlement, Craft has agreed to give Maj. Gen. Robert E. Sadler's six adult children most of the $450,000 in life insurance proceeds from his April 9, 1988, shooting death and some of his personal effects, including his military memorabilia and family photos, an attorney for the children said yesterday.

Kathe Sadler-Wright, 35, one of Sadler's daughters, said yesterday, "We did not want to see" Craft profit from Sadler's death.

The wrongful death suit, which claimed that Craft "intentionally" caused Sadler's death, was set for trial yesterday in what her attorney, Daniel R. James, said would have been a "de facto murder trial," played out in the same courtroom before the same judge with many of the same witnesses.

Craft initially told state police that her 62-year-old husband, whom she met through a personal ad in Washingtonian magazine, shot himself while playing with a loaded .38-caliber revolver at their 187-acre vacation home in Grant County, W. Va.

His death, from a bullet wound behind his right ear, was first ruled an accident.

But Sadler's children and others began raising questions, and Craft was charged with first-degree murder. She then changed her statement, saying she was trying to wrest the gun from Sadler when it fired.

During the 1988 trial, Craft shouted her innocence from the witness stand and apologized to jurors for not telling the whole truth the first time. Strangers in the courtroom sobbed.

Craft was acquitted.

James said yesterday that his 54-year-old client admits to being "careless."

"When she took the witness stand, she had to admit that she was negligent," James said. "She's always admitted that she grabbed a loaded gun out of the general's hand."

Because debate over the verdict in the murder case raged in the tiny town of Petersburg, W.Va., 150 miles west of Washington, James said he was ambivalent about facing a new, albeit smaller, jury in a civil case because "there were people out there who thought she was guilty and got off."

James said he also believed that the judge would have allowed as evidence Craft's conviction on insurance fraud in Fairfax five months after her acquittal.

Craft was found guilty in a scheme involving theft of silver and jewelry that was later discovered hidden behind a fake wall in her Springfield home.

James said the defense had hired a "shadow jury" of community members to watch the proceedings to gauge public sentiment. The shadow jurors, who would not have known which side was paying them, would have been asked each day for their opinions about how the trial was going, he said.

Their opinions would have helped him decide strategy in the case.

Brian C. Shevlin, attorney for Sadler's children, said yesterday that the settlement is tentative until his clients receive their father's belongings.

The children, from Sadler's first marriage, will receive an estimated $360,000 after the attorney fees from Craft's criminal cases are paid, he said.

Sadler-Wright said Craft has also given up her right to be buried at Arlington National Cemetery with her late husband. She has also agreed to donate to charity money generated from any book or movie based on the case.

Craft, who has published several books of poetry, is heavily in debt and has sold the farm in Grant County, James said.

She recently produced a tape called "Mary Faye Craft's Facets of Music," described as a country, blues, pop, rap, classical, gospel tape.

"She's lost her home, she's lost her farm and she's in debt for over $100,000," James said. "We were trying to just get out of the case as cleanly and neatly as possible."