Unexpectedly losing a loved one is profoundly distressing, especially when their passing results from another party’s negligence. This compounding of grief with the struggle for justice can overwhelm any family.
Surviving family members usually wonder, How are wrongful death settlements paid out? Only certain surviving family members are eligible to receive compensation in a wrongful death lawsuit. The primary options are a lump sum payment or a structured settlement.
What Are Wrongful Death Lawsuit Settlements?
A wrongful death lawsuit arises when the negligent or intentional actions of another party cause a person’s death. This legal action allows surviving family members to seek compensation for their loss.
The types of damages typically pursued in wrongful death settlements include loss of earning capacity, loss of companionship, loss of household services, support, maintenance, and more. If the defendant’s actions include a willful act, omission, or gross negligence, family members may also be eligible to receive punitive damages.
How Are Wrongful Death Settlements Paid Out?
In wrongful death cases, settlements can be paid out in several ways, depending on the parties’ agreement. Each method has unique advantages and disadvantages that can significantly impact the family’s financial planning.
Lump Sum Wrongful Death Settlement
A lump sum wrongful death settlement involves a single payment of the entire settlement amount. This method provides the beneficiaries with immediate access to funds, which can be crucial for covering significant expenses quickly, such as medical bills, funeral costs, or outstanding debts.
The primary benefit of a lump sum is simplicity and immediacy. It allows families to manage significant expenses without waiting and avoids the uncertainty of future payments. Managing a large amount of money can be challenging without proper financial guidance. Without strategic planning, there’s also a risk of rapid depletion of the funds, potentially leaving nothing for long-term needs.
Wrongful Death Structured Settlement
Structured settlements provide compensation in regular installments over a period of time, which could be several years or even decades. This method provides a steady income stream for the beneficiaries.
Structured settlements offer long-term financial security and can meet a beneficiary’s future needs, such as ongoing living expenses or educational costs. They also help in budgeting and prevent the mismanagement of funds. While structured settlements don’t earn interest like savings accounts do, there is the opportunity for potential growth that might be tax-free.
The main drawback of a structured wrongful death settlement is its lack of flexibility. Once parties agree to a structured settlement, making changes is difficult if the family’s financial situation evolves. Additionally, the total amount received over time might be affected by inflation, potentially diminishing the value of the payments.
Understanding these two wrongful death settlement types helps families decide which option best suits their current and future financial needs. This decision is crucial and often requires careful consideration and, ideally, the guidance of a financial advisor or a knowledgeable wrongful death lawyer.
For a free legal consultation, call (713) 532-4474
Factors Affecting a Settlement Payment Structure
Several factors can influence the structure of a wrongful death payment. These factors include the family’s financial needs, the health and age of the beneficiaries, taxes, negotiations, and their overall financial strategy.
Financial Needs of the Family
The deceased’s dependents’ immediate and future financial requirements play a critical role. A lump sum might be more appropriate for families needing quick access to funds to cover debts or ongoing living expenses. Conversely, a structured settlement may be preferable for managing long-term financial stability, especially for minors or dependents with long-term care needs.
Age and Health of Beneficiaries
Younger beneficiaries often benefit more from a structured settlement that provides continuous support throughout crucial life stages, such as education or early adulthood. For older beneficiaries, a lump sum might provide more immediate benefits, particularly if there are concerns about their longevity.
Tax Considerations
Tax implications can also affect the choice of settlement structure. Generally, wrongful death settlements are non-taxable, but the specifics can vary based on the settlement’s structure. Professional financial advice is essential to navigate these complexities and maximize the settlement’s value after taxes.
Negotiations with the Insurance Company
The defendant’s insurance company’s willingness to offer a lump sum or a structured settlement can also impact the payment method. Negotiations handled by experienced wrongful death lawyers can significantly influence the settlement terms, tailoring them to the family’s best interests.
Overall Financial Strategy
The family’s broader financial plans should align with the settlement structure, including investments, other income sources, and estate planning considerations. A well-thought-out approach can ensure that the settlement complements other financial arrangements and supports the family’s long-term objectives.
Choosing the appropriate settlement payment structure involves balancing these factors to meet the family’s current needs and future goals. This decision often requires detailed discussions with legal and financial advisors to ensure the family considers all angles and does what’s best for their financial well-being.
Hiring a Houston Wrongful Death Lawyer
In wrongful death cases, having the right legal support is invaluable. A skilled Houston wrongful death lawyer can help in numerous ways, including:
- Navigate complex settlement processes. They understand the intricacies of wrongful death claims in Texas and can manage all legal proceedings, negotiations, and documentation for a wrongful death settlement.
- Maximize settlement value. Experienced attorneys are adept at negotiating with insurance companies and opposing counsel to fight for a settlement that reflects the claim’s full value.
- Provide compassionate support. During such a difficult time, a dedicated lawyer also offers emotional support and understanding, helping clients cope with the legal aspects of their loss without additional stress.
Choosing a lawyer experienced in wrongful death cases is crucial. Look for a wrongful death lawyer who:
- Has a proven track record of success in similar cases;
- Can show examples of positive client testimonials;
- Is communicative and accessible, ready to answer your questions and keep you informed throughout the process; and
- Demonstrates empathy and understanding of your situation.
While Texas law doesn’t require you to hire a lawyer in a wrongful death case, it’s important to consider it. Wrongful death cases are typically complicated. Expect the defendant’s insurance company to do whatever is necessary to minimize its potential payout.
Contact Kolodny Law Firm for a 100% Free Case Review
If you have questions about how wrongful death settlements are paid out, Kolodny Law Firm stands ready to help. Understanding the negotiation and settlement process is crucial for any family dealing with a wrongful death lawsuit. Our legal team has years of experience assisting grieving families in recovering compensation in wrongful death lawsuits.
If your family is dealing with such a tragic loss, consider contacting a wrongful death lawyer at our office. We have the legal skills and offer the compassionate support you need during this challenging time. Schedule a consultation to learn how we can help.
Call (713) 532-4474 or complete a Free Case Evaluation form
Where to find our Houston office
Alan Kolodny is committed to representing injured clients in Texas and throughout the United States. Alan earned his B.A. from Rice University and his J.D. from Southern Methodist University.
He focuses his practice on representing plaintiffs in personal injury cases involving the following matters: maritime and offshore accidents, including those under the Jones Act; automobile and 18-wheeler truck accidents; and industrial site accidents, work-related accidents, and claims for injured railroad workers under the Federal Employers’ Liability Act.
Loading...