It’s never easy to file a wrongful death lawsuit. However, the financial recovery may help you get on with your life.
There is no real way to effectively cope with the sudden and unexpected death of a family member, particularly if their death was as the result of the negligence of another person. If you were successful in going to verdict and were awarded a significant amount of money for your loss, there are a couple of things you need to know about that settlement. These are things you should also discuss with your Austin personal injury attorney.
There are normally two paths to choose for a settlement in a wrongful death case. You will need to make a choice between taking a lump sum or a structured settlement. Generally speaking, you may be offered a smaller amount if you choose lump sum – it depends in how the settlement is calculated and whether the money was translated into today’s dollar value. On the other hand, a structured settlement is paid out in even payments, much like equal billing for a utility company, over a specified length of time.
The time period may be yearly or monthly; this largely depends on what the defendants are offering in their settlement. Don’t feel you need to make an instant decision about all this often-confusing information. Instead, talk to an Austin personal injury attorney and ask him or her to outline the various pros and cons of lump sum settlements versus a structured settlement. After all, it’s the attorney who has been with you every step of the way, working to get larger sums and better terms for the settlement.
When it comes to wrongful death settlements, the IRS does not tax them. However, in a large number of states, punitive damages are taxable – except in wrongful death cases. Make sure you ask your lawyer about what the law is in your state so you are completely informed about how your settlement would work.
You should also ask to consult a top-notch tax attorney in cases like this, because a large wrongful death settlement may hike the deceased’s estate over the tax-exempt limits applicable to inheritance laws. Again, this may be state specific and you should ask, rather than find out later you owe taxes. No one wants to discover that they owe tens of thousands of dollars when they could have handled the situation upfront by paying any due taxes immediately.
Would you want to take a structured settlement and convert it into a lump sum payment? After all, you have regular and reliable income. While that may be the case when the settlement terms first went into effect, people’s lives change. They may want to take advantage of a super business opportunity and need extra cash to do that. Or, they may discover they have a terminal disease and want to enjoy their remaining years by doing what they want.
Structured settlements, by their very name, mean a set timetable for dispersal of a set amount. In order to convert this to a lump sum, you would need to talk to a company that specializes in paying you a lump sum in exchange for your structured settlement. You need to know that if you choose to do this, your lump sum will be lower than what your total settlement is worth, because they take a fee off the top. You might want to really think about this before you do anything, as the fees are typically high. On the other side of the coin, if you really need the money, the high price you pay to convert it just might be worth it.