1821 Jefferson PL, Ste. 301
Frederick, MD 90010

  • Home
  • Credentials Matter
  • Practice Areas
    • Personal Injury
    • Automobile Accident
    • Medical Mistake
    • Workers’ Compensation
    • Wrongful Death
    • Cruise Accident
  • Blog
  • Frederick MD Personal Injury Law Office

December 21, 2019 by admin

Taxes and Your Wrongful Death Settlement

 Personal Injury Lawyer

When your loved one wrongfully dies, you deserve financial compensation to take that little bit of the burden off your shoulders. Because many wrongful death settlements are so large, surviving family members often wonder what their taxes are going to look like the following year. Do you have to pay taxes on a wrongful death settlement? The following should set things straight.

Compensatory Damages

Any damages that are considered compensation for the victims in a wrongful death case are not taxable. Examples of compensatory damages include:

  • Funeral and burial expenses
  • The pain and suffering your loved one experienced before passing away.
  • Lost wages your loved one would have brought to the family if he or she had not died.
  • Loss of care, companionship, sexual intimacy and similar benefits.
  • Medical bills incurred after the accident that led to the death.

In many wrongful death cases, the aforementioned damages are all that are received, so the whole settlement is tax free.

Punitive Damages

Unlike compensatory damages, punitive damages do nothing to compensate the victims. Instead, they are meant to punish the defendant because he or she had particularly offensive or bad behavior. For example, if the defendant purposely hit the deceased out of anger, and death was the result of that hit, he or she would be a candidate for paying punitive damages. You can see the difference between that type of criminal behavior and someone who accidentally hit someone in a crosswalk because he or she was blinded by the sun.

Estate Taxes

If you plan to receive a particularly large amount of money as a wrongful death settlement, you may not owe income taxes, but it’s possible you could owe estate taxes. Federal tax law in 2018 requires these taxes on estates valued at or above $11.18 million. While most wrongful death case settlements won’t get near that value, it’s always a possibility to be aware of when you’re thinking about taxes.

What to Do Next

If your loved one died because someone was negligent in any way, you shouldn’t have to suffer more than you’re already going to. Financial loss is a huge concern when a family member dies, and adding taxes to that is like adding fuel to the fire. Fortunately, most wrongful death settlements don’t require taxes be paid, though every situation brings different circumstances to the table. If you’re worried about your wrongful death lawsuit, contact a wrongful death lawyer in Trenton, NJ for help in understanding what you should do next.

 


 

Thanks to Davis & Brusca for their insight into personal injury claims and taxes for a wrongful death settlement.

Filed Under: Uncategorized Tagged With: personal injury lawyer

Frederick Personal Injury Lawyers

  • Home
  • Credentials Matter
  • Practice Areas
    • Personal Injury
    • Automobile Accident
    • Medical Mistake
    • Workers’ Compensation
    • Wrongful Death
    • Cruise Accident
  • Blog
  • Frederick MD Personal Injury Law Office

FREDERICK PERSONAL INJURY RESOURCES

Frederick Personal Injury Law Firm
Frederick Personal Injury Attorney
Frederick Car Accident Lawyers
Frederick Medical Malpractice Attorneys

Other Resources

Medical Injury Lawyer
Service Truck Accident Lawyer
Personal Injury Lawyers Washington DC
Find a Divorce Lawyer Cypress, TX
Disability Discrimination Lawyer Washington, D.C.
Personal Injury Lawyer Buffalo, NY
Personal Injury Blog
Birth Injury Lawyer Beverly Hills CA
Pedestrian Accident Lawyer Denver CO
Premises Liability Lawyer Atlanta GA
Truck Accident Lawyer Los Angeles CA

Free Consultation

Request a free consultation with one of Frederick, MD's premier personal injury law firms.

© COPYRIGHT 2022 PERSONAL INJURY LAWYERS OF FREDERICK | POWERED BY MATADOR SOLUTIONS - INTERNET MARKETING COMPANY