Who Gets the Money in a Wrongful Death Lawsuit
The sudden or unexpected loss of a loved one is an event that is hard to imagine, and certainly seems like a monetary value cannot be placed on what your family has lost. However, if you and your family are considering filing a wrongful death lawsuit against the person(s) responsible for your loved one’s death, you will have to do just that.
When you file a lawsuit, you and your wrongful death attorney will attempt to place a value on your case. Of course, there is no compensation for your loss, so instead, a wrongful death claim will place a value on your case based on factors like:
- The deceased individual’s income
- Medical expenses prior to death
- Funeral and burial expenses
- Pain and suffering the victim experienced prior to death
- Whether or not the deceased individual was the primary supporter of minor or disabled children
With these and other applicable factors in mind, your attorney will place a value on your case, which will determine what compensation, or damages, are pursued in the lawsuit.
Wrongful Death Compensation Distribution
It is common for the parties involved in a wrongful death lawsuit to question who gets the money if the lawsuit is successful. Distribution of a wrongful death settlement can be somewhat complicated, and may depend on the deceased’s will, estate, and other factors. Generally speaking, the court will consider the following:
Beneficiaries
If beneficiaries (i.e. children) are under 18, they cannot legally receive compensation in a wrongful death case. However, compensation may be awarded to them via an appointed guardian, or through a trust set up for the beneficiary when he or she reaches 21 years old.
The court will also consider the legal capacity of beneficiaries. For example, if a beneficiary is over 21, but suffers from a cognitive disability that renders him or her unable to manage their own finances, then the beneficiary would be managed as if he or she is a minor.
Spousal Relationship
In most cases, the spouse of the deceased will receive more compensation than children or other beneficiaries. Generally, the spouse will receive no less than one-third of the value of a wrongful death claim, regardless of how many beneficiaries there are. The remainder would be split up among the other beneficiaries.
Creditors
Before any other parties get access to compensation in a wrongful death claim, any outstanding bills or debts will first be paid. In some cases, these debts are a result of the accident or injuries. In others, there may be outstanding debts from other sources, such as taxes owed, real estate, or investments. Estate assets are also subject to creditor claims, which means that if debts are not paid, the creditors can file a claim in probate court.
The Internal Revenue Service (IRS)
No matter how devastating your situation is, the IRS can still factor into your wrongful death claim. Money that is distributed as part of an estate can be taxed. If the amount exceeds minimum limits, then state and federal taxes can be withdrawn before money is distributed to beneficiaries.
It is important to note, however, that certain damages are not subject to taxes, such as compensatory and punitive damages. It is important to discuss how taxes factor into your legal claim before filing.
Get Help with Your Wrongful Death Claim
Determining how an award or settlement is distributed is one of the more complicated aspects of a wrongful death lawsuit. That is why it is important to work with an attorney who will thoroughly examine every aspect of your case to determine how best to distribute assets.
At The Embry Law Firm, we will examine your case to determine if any debts are owed, who the beneficiaries are, and how much you could stand to receive. Our goal is to resolve your case with no surprises, so you can focus on healing and moving forward.
