7 Things to Know About a Wrongful Death Settlement
A wrongful death claim is not something you ever want to
have to deal with because it means you've lost someone close to you.
Wrongful death claims stem from the loss of your loved one
due to someone else's negligent behavior.
It's important to realize, while the financial elements may
not be your top priority, that you may be entitled to recover financial damages
if your family member wrongfully dies.
With that in mind, the following are some of the important
things to know about a wrongful death claim as well as a settlement.
1. Are Settlements Taxable?
First and foremost, wrongful
death settlements are not taxable for the most part. The compensation for
physical illness or injury, emotional distress, medical expense compensation,
and compensation for loss of income are not taxable specifically.
However, if you were to deduct medical expenses and then
these are reimbursed through a settlement, you have to report the original
amount as income on your taxes.
There is something else to specify here—punitive damages are
often taxable, but it depends on the specific situation.
2. Wrong Death Claims Involve All Types of Accidents
The type of accident we most often think about as being
associated with a wrongful death claim and subsequent settlement is a car
accident. That is true, but wrongful death claims can also stem from medical
malpractice or product liability.
A government agency, company, or individual could be legally
held responsible for causing the death of another person if
they behaved negligently.
3. Only Certain People Can Sue For Wrongful Death
State laws dictate who can sue for wrongful death. A claim
has to be filed by a representative of the decedent's estate on behalf of
survivors. The representative is typically the estate executor.
The people who may be able to sue for wrongful death
include:
- Immediate family members.
This is true in all states, and immediate family members include spouses,
children and adopted children. For unmarried children, their parents can
also file a lawsuit and potentially recover damages.
- Depending on the state, a
domestic partner who was dependent on the person who died may be able
to file a claim.
- Some states will let other
family members, like siblings or grandparents, bring a claim.
- Anyone who suffered
financially due to the death of the person can file a lawsuit in some states.
- In the instance of the
death of a fetus, the parents may be able to file a wrongful death
lawsuit.
4. Only Certain People Can Be Sued
There's actually, in some ways a wider field of people who
can be sued for wrongful death than can file a lawsuit.
For example, a government agency can be sued if they didn't
maintain the roads properly, as can the maker of a dangerous vehicle part.
If someone sold or gave alcohol to an impaired driver who
went on to kill someone, they can be sued, and so can the
owner of the place where the alcohol was used.
These are just a few of the many examples.
5. There Is No Average Wrongful Death Settlement
One of the first questions many people have is what the
average wrongful death settlement is, and there really isn't one.
Some cases settle for tens of thousands of dollars, while
others settle for millions or tens of millions.
There are formulas that can be used to calculate a specific
case though, such as the lost future financial support that comes from your
loved one's death, medical, funeral, and burial expenses, and intangible losses
like loss of affection and loss of companionship.
6. There Are Factors That Can Reduce the Settlement Amount
You may get a settlement that's less than what you expected
based on a number of potential factors. For example, if your loved one played
some role in an accident, even though they lost their life, it could reduce a
wrongful death settlement.
In some states, the settlement might be reduced based on a
percentage of their fault.
7. Punitive Damages May Be Awarded
Finally, punitive
damages may be awarded in some claims. Punitive damages aren't part of a
settlement. They stem from cases that go to court. Punitive damages are meant
to punish the wrongdoer who acted negligently or intentionally, and those
actions led to someone else's death.
If you receive punitive damages, as was mentioned briefly
above, you may have to pay taxes on these, depending on where you live.