Are Wrongful Death Settlements Taxable?

Whether your wrongful death settlement is taxable depends on the damages you receive from the liable party. Generally, the US Tax Code does not consider the money paid as compensatory damages for illness or sickness through a lawsuit or legal settlement as income. So, the funds awarded for the following damages in a wrongful death settlement would not be taxable:

• Reimbursement for the deceased person’s medical expenses
• The deceased person’s pain and suffering up to the amount paid for medical care
• The cost of repairing or replacing any personal property belonging to the decedent damaged in the accident

Portions of Wrongful Death Settlements that Can Be Taxed

Some damages from wrongful death settlements are taxable. They include:

• Punitive damages
• Emotional distress not attributable to a physical injury or illness
• Reimbursement for lost income the deceased party will not earn because of their death
• Interest paid or earned in structured settlements or long-term payouts in a wrongful death suit

How do Wrongful Death Settlements Get Paid?

Settlement negotiations typically determine how you will receive the proceeds of a wrongful death settlement. In most cases, defendants pay out wrongful death settlements in one of two ways:

• Single lump-sum payment: A one-time payment to the deceased party’s personal representative that represents the total value of the settlement.
• Installments: A structured series of payments with a schedule determined during settlement negotiations in which the defendant pays out the settlement in increments over a designated period.

Who Can File a Wrongful Death Action in Florida?

Florida law does not qualify you to bring a wrongful death action against the negligent party just because you are a relative of the decedent. Instead, you must be designated as the “personal representative” of the deceased person’s estate to demand damages in a wrongful death case.

If the decedent had a will, it would specify their personal representative. However, if the victim died without a will, a probate court would appoint their personal representative post-mortem.

When Can You File a Wrongful Death Case?

If you, as the deceased’s personal representative, believe their death was preventable or resulted from negligence, you could file a wrongful death case against the negligent party. Common examples of negligence that can lead to wrongful death cases include:

• Medical malpractice
• Car accidents
• Reckless discharge of a firearm
• Construction accidents
• Marketing or selling unsafe products

How do You Prove Negligence in Wrongful Death Cases?

To prove negligence in wrongful death cases, you must make a persuasive case that the deceased party would be (or should still be) alive, except for the carelessness or reckless behavior of another party.

For example, suppose your loved one died when a speeding vehicle hit them while crossing the street on a “walk” signal. The driver of that vehicle may have negligently caused your loved one’s death because they exceeded the posted speed limit and failed to yield the right of way to a pedestrian.

If you can show that your loved one would likely be alive, but for the driver’s negligence, you could recover wrongful damages from the at-fault driver.

Wrongful Death Settlements Can Help Ease the Burden of Losing a Loved One

Losing a loved one due to another party’s negligence increases the pain and anguish felt by surviving members of the deceased person’s family. However, with that said, the emotional toll these losses take is not the only consequence that surviving family members deal with.

Florida law allows surviving family members to hold negligent parties accountable through wrongful death actions. The damages awarded in these suits can’t replace the lost loved one, but they can give surviving family members some measure of financial relief and a sense of closure.

Let Our Wrongful Death Attorneys Handle Your Case

The quality of your legal representation can make a significant difference in the outcome of any legal case, including a wrongful death action. Proving negligence in wrongful death cases requires a tremendous amount of planning, skill, and legal resources. However, the wrongful death lawyers at Dismuke Law recognizes the hardship that families experience after losing a loved one due to someone else’s negligence.

We can handle your wrongful death case on a contingency basis. That means our firm will represent you in all aspects of pursuing the negligent party for damages, but we won’t bill you unless we negotiate a settlement or win your wrongful death case. If you’re unsure whether your loved one’s death resulted from negligence, contact our office today for a free consultation.