Losing a loved one from an accident can cause appalling anguish and misery. This devastating experience can cost you and the whole family in several ways — physically, mentally, and financially.
Sad to say that some survivors of the departed victims think twice before filing a wrongful death lawsuit because they don’t have any idea about the tax inferences of getting a wrongful death settlement. In most cases, wrongful death settlements are not taxable.
Talking to one of our knowledgeable wrongful death attorneys at LA Injury Group will help you better understand if this kind of settlement is taxable. Call our office at (818) 240-1800 and schedule a FREE consultation.
A wrongful death lawsuit is generally arranged by the surviving family or the estate of the deceased victim (decedent) against the liable person (defendant) whose misdemeanor caused the victim’s death. It’s worth noting that bringing a wrongful death lawsuit isn’t like filing a car accident lawsuit.
Filing a wrongful death lawsuit involves difficult legal issues, and counting damages will require complicated expert attestation. If this is the kind of case you’re going to file, seeking the help of a skilled wrongful death lawyer at LA Injury Group is a must.
A wrongful death claim is an allegation against an individual who can be held liable for someone else’s death. It’s brought in a civil court, generally by the surviving family, according to the statute. They will receive remuneration for the harm and suffering after losing a loved one.
Survivors of the decedent are eligible for compensation for the economic and non-economic damages and losses they suffer because of their loved one’s death due to the negligent or intentional actions of other people.
The compensation amount that family members generally receive can easily ascend into millions of dollars. Because of this, several people who are planning a wrongful death claim or survival action deliberate if they can prevent sustaining a considerable tax liability once they receive an award or settlement. Any circumstance where someone else’s negligence caused the death of your loved one can side with a wrongful death claim.
Also called substantial damages, these types of damages are typically awarded for the actual losses the claimants suffered. Its purpose is to compensate the living heirs for financial and non-financial losses.
Portions of a judgment or settlement that are “compensatory” are non-taxable according to the Internal Revenue Service. This also applies if the parties categorize the whole amount as compensatory, and the IRS can dispute the finding to get its full amount of taxes.
Additionally, the service has the authorization to challenge the settlement’s structure in situations where the fraction of punitive to compensatory damages doesn’t reflect the “economic essence” of the settlement.
Compensatory damages intend to remunerate the decedent’s survivors for their losses, including overheads, medical expenses, funeral and burial costs, and lost income, among others. Even if some don’t have clear dollar amounts accompanying them, non-economic damage such as pain and suffering is compensatory damage that’s also non-taxable.
This type of award or damage isn’t compensatory and doesn’t compensate the victim or his family for all the losses incurred. Therefore, punitive damages are taxable.
The court decides if it will award this to the surviving family to punish the defendant for his egregious misconduct and to also discourage others from doing the same. Punitive damages can be only awarded in a survival action unless the wrongful death involves the abuse of an elder.
The decedent’s surviving heirs can receive punitive damages award only when there’s proof of oppression, malice, or fraud by the liable party.
A wrongful death claim embodies the losses to the family. It includes the financial and emotional support that they would have given if they were alive. Survival actions, on the other hand, demonstrate the claims that the decedent would have been allowed to raise if they survived the accident.
In California, a wrongful death claim can stem from any kind of situation, if the defendant’s negligence caused your loved one’s untimely death. A survival action can emanate from the same circumstances but with two additional principles:
The law only allows survival actions when the injured victim didn’t die immediately after the incident. This is brought by the decedent’s estate instead of their family members. Moreover, it can include both compensatory and punitive damages.
For any complicated legal situation, it’s sensible to speak with a well-versed wrongful death attorney who can identify negligent people and hold them responsible for your loved one’s unlawful death. At the same time, he can help you understand how a wrongful death settlement will impact your taxes. The clock is ticking so don’t hesitate to contact LA Injury Group as soon as possible.
The surviving spouse or family members are eligible to file for monetary losses they suffered because of their loved one’s tragic death. Damages you may recover include:
The trepidation of paying a high tax fee must not hinder you from pursuing a wrongful death lawsuit. Our finest wrongful death attorneys at LA Injury Group will help you get fair and just compensation.
Hiring a wrongful death attorney can make a huge difference in your case. We'll not only protect and defend your rights, but we also got your back all throughout the process. Call (818) 240-1800 for help and schedule a FREE evaluation of your case. We work on a contingency fee basis.