How are Wrongful Death Settlements Paid Out?

A wrongful death case is classified as any death directly or indirectly caused by reckless or negligence of another. This accounts for whether the victim dies instantaneously or passes away months or years later due to complications related to the initial injury.

According to the CDC (Center for Disease Control and Prevention), unintentional injuries are the fourth leading cause of death in the United States, with over 160,000 deaths attributed each year. The agency says the most common causes of wrongful death claims are:

• Vehicle Accidents

• Pedestrian and Bicycle Accidents

• Slip and Fall, or Being Struck By an Object at a Property

• Medical Malpractice

• Accidental Overdose or Poisoning

• Boating or Drowning Accidents

• Workplace Accidents or Illnesses

Depending on your unique situation, you may have a wrongful death case for which you should be compensated. If so, keep reading to learn how to calculate wrongful death compensation, how they're paid out, and more.

Trying to determine the price of a life is never easy. This is one reason it's best to work with an experienced attorney. They can help advocate and negotiate for you to ensure you get the fairest settlement possible.

There are several factors to consider when calculating wrongful death compensation:

• The age and circumstances of the dependents of the deceased.

• The circumstances of the survivor submitting the claim.

• The income of the deceased.

• The earning capacity, education, and training of the deceased.

• The state of health of the deceased.

• The age of the deceased.

• The value of lost benefits such as health insurance, retirement, or pension.

• Medical expenses.

• Funeral expenses.

The amount calculated will not be an estimate. Instead, it will be an amount supported with hard evidence and proof.

The money survivors receive from wrongful death cases comes from the at-fault party's insurance. Insurance companies provide liability coverage for individuals and entities for such tragic incidents. However, the insurance policy will have a limit amount – which means the insurance provider will not pay outside of that amount and the person or company is personally liable for other charges.

If the person does not have insurance coverage, they are fully responsible for the judge or jury's settlement. They are also responsible for all legal fees of the survivors.

Every state has laws that establish clear rules for the money in wrongful death cases.

Although these laws vary, most state that any money received from a wrongful death case will be equally divided among the living spouse and children. If a child is a minor, the appointed guardian is responsible for handling their share of the settlement.

For example, if the victim of the unnecessary death has a surviving partner but no children, then the spouse would receive all compensation from the claim.

If the decedent had a surviving spouse and two children, each would receive one-third of the settlement.

If there were no spouse but two surviving children, each child would receive half of the settlement.

Some states have exceptions to how to divide compensation from wrongful death cases. For example, if the decedent passes away with no surviving spouse or children but has married parents, they will share the money equally. However, a judge determines how to split the money for unmarried or divorced surviving parents.

The compensation from estate claims can be divided differently from wrongful death claims. Here's where an experienced lawyer can offer advice on proceeding with the claim and handling these complicated issues.

Wrongful death settlements are paid out in two ways—lump sum payment and structured settlements.

How the settlement is paid depends on the parties involved in the case. Often, the defendant's circumstances dictate how the settlement will be distributed. For example, most defendants cannot financially pay thousands of dollars in a lump sum payment. Therefore, they will have to make payments over time, known as a structured settlement.

If the settlement is covered entirely by the at-fault party's insurance provider, a lump-sum payment is likely. Insurance companies will often pay the settlement all at once rather than dragging it out.

A lump-sum payment is a settlement paid in full to the survivor(s), either by the defendant or their insurance company.

If the survivors would rather have a structured settlement, they can put the money in a trust fund. Trust funds allow accounts to make scheduled payments over a more extended period.

The benefits of receiving a lump sum payment from a wrongful death claim are that the survivors can quickly pay off the debt accrued during the lawsuit. Accrued debts may be funeral costs, medical bills, and legal fees. In addition, paying off debt helps eliminate interest accumulated by these debts.

If the deceased were the family's primary financial support, some other financial losses and debts might come into play.

When awarded a lump sum payment, the drawback faced by many is managing a large amount of money. In addition, if the survivors do not use the money as intended, debt will still accumulate after the money's gone.

A structured settlement in a wrongful death case is when the at-fault party pays the settlement in smaller payments to the survivors over a designated period.

Both parties can agree on when payments will be made. Once the decision is made, it's unlikely that the terms will change.

If preferred, survivors who receive a structured settlement can turn this type of settlement into a lump sum payment by selling their rights to future payments in an annuity. This requires court approval but often helps recipients who need an immediate larger payment for debts.

The benefits of a structured settlement are that these payments provide long-term financial security and stability. If the deceased were the primary income earner, these payments would help the family stay afloat.

A drawback to structured settlements is not paying debt immediately – unless going through the court as mentioned above. If debts are not paid immediately, interest will occur, making it harder to pay the debt off ultimately.

Another drawback is not changing the terms of a structured settlement. If circumstances change for the survivor, they will have to deal with the structured settlement they agreed upon earlier.

Survivors also risk the at-fault party not paying on time with structured settlements. But, again, this is an issue that an experienced lawyer can help handle in court or negotiations before the structured settlement is set in stone.

If payments are compensatory, the IRS states that most wrongful death settlements are non-taxable. Meaning the rewarded money is non-taxable if intended to account for the pain and suffering. However, if the compensation is intended to punish the at-fault party, the IRS may tax the settlement.

A lawyer will ensure that any awarded compensation is clearly defined before settling a wrongful death claim. Ensuring your financial security and helping resolve any confusion in the future.

Each wrongful death case is different based on many circumstances. Factors such as when the suit is filed and how the judge rules it can vary based on circumstances. There is no set length of time when a judge will resolve a case.

Many wrongful death claims settle within a few months. However, wrongful death lawsuits can often last for years. On average, you can expect a wrongful death claim to be resolved within one to four years.

A wrongful death lawyer can help review your evidence and case in detail to determine the amount of payout you can expect and when. A lawyer can also provide legal advice and assistance throughout the process and act as your advocate to ensure fair commendation.

Without an experienced lawyer on your side, your chances of receiving fair compensation are slim.

Contact one of our Denver wrongful death lawyers today to get started.