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How are Wrongful Death Lawsuits Paid Out?

Young woman grieving the wrongful death of a loved one

A wrongful death lawsuit is a claim brought against a defendant for causing someone’s death purposely or negligently. Under Georgia law, wrongful death claims are allowed by the estate of the deceased to cover the financial loses from their loved one’s death. The suit can be filed by a personal representative of the estate or family members.

Once a lawsuit is won, payments are distributed. However, the way the payments distribute depend on the circumstances of the lawsuit, the amount, and the defendant’s ability to pay.

The Compensation Involved in Atlanta Wrongful Death Cases

A wrongful death lawsuit is traumatic for the surviving family members. Often the only way they can relieve the stress and financial burden of their loved one’s death is through a lawsuit. Most grieving loved ones never start off thinking that they will file a suit. However, once the costs start to take their toll, they find themselves without any other option to pay medical costs, funeral and burial expenses, and cover the financial contributions their loved one used to make to the household.

The statute dictates damages that family members can receive. Also, in Georgia, there are two types of wrongful death claims that can be filed:

  1. Estate Claim – This is where the estate claims recovery for medical expenses related to the injury that caused the loved one’s death, funeral and burial expenses, and pre-death pain or suffering.
  2. Full Value of Life Claim – Full value of life claims are determined by the jury. Typically, these claims are filed by the surviving spouse and children, and they cover things like loss of companionship, loss of support from a parent, and so forth. They are distributed differently than the estate claim compensation. In these cases, the surviving spouse cannot receive any less than one-third of the compensation – with the remainder split amongst surviving children (if applicable).

How Much Compensation is a Value of Life Claim?

No dollar amount can make up for the loss of a loved one, and some surviving spouses find it difficult to put a price on their spouse. However, the claim for the full value of life is measured by the life lost to the spouse and children. It is broken down by economic and non-economic damages, including:

  • Economic DamagesThese are the quantifiable expenses, such as the amount of income the loved one would have earned for the remainder of their working years, and the amount they would have contributed toward the household (such as health insurance).
  • Noneconomic Damages These are the losses that have no tangible value, but include loss of consortium, companionship, and more.

How Wrongful Death Settlements are Distributed

Distribution is difficult in wrongful death settlements because compensation may go toward different parties – not always family members or beneficiaries of the estate. Some considerations that the court will make when deciding how to distribute the assets include:

  • Age of the BeneficiariesChildren under the age of 18 years cannot legally inherit or receive compensation for their wrongful death case. Therefore, the courts will need their financial well-being considered. They may do this by appointing guardian ad litem to oversee the compensation, set up a trust, and manage that trust until the child reaches an age where they can legally receive the compensation. When beneficiaries are all adults, then the parties’ attorneys would determine what a fair value is per party.
  • The Legal Capacity of the Beneficiaries Some beneficiaries may be legal adults but suffer conditions like Alzheimer’s or be permanently disabled. In this case, their compensation would be handled like a child under the age of 18.
  • The RelationshipA spouse of a decedent will receive more than surviving children in a wrongful death case. For example, in full value of life claim, the compensation can be split equally, but the spouse cannot receive less than one-third per the statute.
  • Balances Due If there are liens against the estate for outstanding costs, such as medical expenses and hospital bills from the decedent’s injuries, then these liens must be satisfied before the remaining compensation can be distributed.

What about Taxes and Wrongful Death Settlements?

You may be under the impression that civil lawsuits are tax-free. However, this is not entirely accurate. In a civil case, punitive and compensatory damages are not taxable by the Internal Revenue Service (IRS). However, money distributed as part of an estate, including compensation for lost wages and income are part of the estate and subject to probate. If these amounts exceed the minimum threshold for the estate tax, then the compensation will be subject to that tax first and any applicable income tax by the state and federal government before it can be distributed among the beneficiaries.

Creditors Have Claims Too

If the estate has multiple creditors, any income compensation from the wrongful death lawsuit goes toward the estate’s assets. These assets are subject to creditor claims in probate court, and the law requires that creditors are satisfied before the remaining assets can be liquidated and distributed.

How an Attorney Can Help

An attorney knows what costs and statutes apply to a wrongful death case. They can ensure that you and your family members not only receive compensation but that these costs are addressed so that you do not lose a significant portion of your award to taxes or creditors.

Furthermore, your attorney can help you with the entire wrongful death lawsuit process. After all, you are grieving, and the last thing you should need to worry about is the logistics of filing a lawsuit or distributing the assets.

To explore your options for a wrongful death case, speak with an attorney from Van Sant Law, LLC now by calling 404-991-5950 or request an appointment online.

David M. Van Sant
Atlanta personal injury lawyer dedicated to helping clients throughout GA get the compensation they deserve.