| Read Time: 3 minutes | Wrongful Death

Are Wrongful Death Settlements Taxable Income?

Texas law allows for anyone who suffered the loss of a loved one to pursue a wrongful death case. Through a Texas wrongful death lawsuit, surviving loved ones can obtain monetary compensation for the losses they endured as a result of the negligent party’s actions. A wrongful death award can easily reach the six and seven-figure range. This may lead many families to wonder, Are wrongful death settlements taxable? Generally, damages collected through a wrongful death lawsuit are not taxable income under the United States Internal Revenue Code. This is because damages in a wrongful death claim compensate a grieving family for losses they sustained and are not considered “income.” However, the IRS will assess tax on certain portions of a wrongful death award. Damages in a Texas Wrongful Death Lawsuit Losing a loved one in a preventable accident is one of the most horrific events a family can experience. To help offset the impact of such a tragedy, Texas law allows surviving families to pursue financial compensation from the at-fault party. While every case is unique, a Texas wrongful death case often contains compensation amounts for the following: Loss of financial support; Loss of future financial contributions; Loss of household services; Loss of company and companionship; Mental and emotional anguish; and Funeral costs and burial expenses. These damages all fit into the category of “compensatory damages,” meaning they compensate a family for their losses related to the accident. In addition, courts award punitive damages in some Texas wrongful death cases. Unlike compensatory damages, punitive damages (or exemplary damages) focus on punishing the at-fault party for their actions. Punitive damages are not awarded in every case. To obtain punitive damages, a family must show that the at-fault party acted with fraud, malice, or gross negligence. Not only that, but a family must prove that punitive damages are appropriate by “clear and convincing evidence,” which is a high legal standard. When Are Wrongful Death Settlements Taxable? While the tax code is quite complex and exceptions exist, the general rule is that compensatory damages are not taxable while punitive damages are taxable. The reason for this goes back to the purposes of each type of damages award. Compensatory damages help offset the losses a family suffers, and therefore, are not considered income by the IRS. In other words, these damages make up for a loss.  On the other hand, punitive damages do not relate to a family’s losses and instead are meant as a form of punishment. Because of this, the IRS considers punitive damages as taxable income in most cases.  How Tax Consequences Play Into Wrongful Death Settlement Negotiations Most Texas wrongful death cases do not go to trial. Instead, the grieving family reaches an agreement with the insurance company to settle the case. Insurance companies like to settle cases because it limits their risk. However, they also want to settle a case for as little as possible. When engaging in settlement negotiations, it is important that you understand the tax consequences of the insurance company’s offer. For example, emotional distress damages can fall into the category of compensatory or punitive damages, depending on how they are classified. Settlements in wrongful death cases often involve significant amounts of money. And given the high income-tax rate, it is imperative that families do everything they can to keep as much of the settlement as possible. An experienced Texas personal injury attorney can help you understand the tax repercussions of an insurance company’s proposed offer. A lawyer may also help you negotiate a more favorable settlement. In short, you should always discuss the tax consequences of a wrongful death lawsuit with your lawyer before accepting any offer from the insurance company.  Contact the Texas Wrongful Death Lawyers at the Zimmerman Law Firm, P.C. If you recently lost a loved one in a Texas accident, the dedicated personal injury lawyers at Zimmerman Law Firm, P.C., are here for you. Our team of attorneys has more than 85 years of experience advocating on behalf of injury victims and their families. We routinely handle cases involving some of the largest insurance companies in the country. With our help, you can hold the negligent party responsible for your loved one’s death accountable for their actions. Not only can this provide your family with much-needed compensation in the wake of the tragedy, but it will also make Texas a safer place by discouraging dangerous and irresponsible behavior. We handle all types of personal injury cases, including those involving car accidents, slip and falls, work injuries, and product liability claims. To learn more, and to schedule a free consultation, give us a call at 254-272-3220 today. You can also reach us through our online form.

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| Read Time: 4 minutes | Wrongful Death

How Are Wrongful Death Settlements Paid Out?

If a loved one passes away due to someone else’s negligence, you should always look into filing a wrongful death claim against the responsible party. The damage that such a loss can have on a family is enormous, so affected parties deserve compensation for their loss. Compared to other civil claim settlements, wrongful death settlements are often very significant in size and scope. If the person you lost was your family’s primary earner, a wrongful death settlement may be essential to your financial stability. Because of this, one of the most common questions we get from our clients in wrongful death cases is, How are wrongful death settlements paid out? There is more than one way that a wrongful death settlement can be paid out. In this piece, we outline those options for you.  What Is in a Wrongful Death Settlement? As noted, wrongful death settlements differ from other civil settlements in their size and scope. This is particularly true when the deceased individual has a family for which they are the primary source of income. In such an event, recoverable damages often include: Funeral and burial expenses; Loss of the deceased individual’s future earnings; Loss of employment benefits (often including insurance coverage); Retirement contributions; and Non economic damages like grief, loss of a loved one, and loss of consortium or companionship. The combination of these damages often exceeds six figures. For example, the 2014 wrongful death of Eric Garner in New York City led to a payout of $5.9 million for his family. That doesn’t mean that your wrongful death settlement will end up in the seven-figure range; there was a lot that went into the Eric Garner case that was atypical of wrongful death claims. Still, this figure illustrates the potential enormity of wrongful death claims. What Options Do I Have for My Wrongful Death Settlement Payout? Because the potential size of a wrongful death settlement is so great, it is important to consider how that money is paid out. After all, you want to set yourself up for long-term financial security. Fortunately, there is more than one way that we can structure wrongful death lawsuit payouts. If you are in the initial phase of filing a wrongful death claim, you should carefully consider how you want to receive your settlement money at the end of the day. Lump Sum Wrongful Death Lawsuit Payout Your first option is to take a lump sum payout of your wrongful death settlement. A lump sum payment is just what it sounds like: you receive a one-time lump sum. The lump sum encompasses the entirety of your settlement, and you can do with it what you wish. The advantage of a lump sum settlement payout is that you get all the money at once. You can take care of any expensive bills you have and spend, save, or invest your money entirely as you wish.  Ironically, receiving all your money at once can also present a drawback. When people receive a significant sum of money all at once, the temptation to spend the money is always there. As a result, sometimes people who accept lump sum payments end up spending the money sooner than they anticipated. This, of course, can lead to financial instability and insecurity. One of the other drawbacks to lump sum settlements is tax-related. For any income generated by the lump sum payment (dividends, capital gains, etc.), you are liable for the related income tax.  Structured Settlement Wrongful Death Lawsuit Payout The other option is to negotiate a structured settlement in your wrongful death case. With a structured settlement, you receive a specified amount of money at defined intervals. You can set up your structured settlement so that you receive a certain amount each year, each month, or even every other year. The advantage this provides is long-term financial security. Many people designate a third party to invest their settlement money for them so that it generates income as it “sits.” Investment can enhance each of the periodic payments. Even better, the income that the invested money generates is not considered taxable. Perhaps the biggest disadvantage to structured settlement payouts is their inflexibility. When you set up your structured settlement payouts, you can do so at whatever interval or the amount you want. However, once the agreement is set, altering it is not easy, and sometimes impossible. Thus, many consider structured settlements risky due to their inflexibility. What If I Take a Lump Sum and Want Something Different? People change their minds all the time. It is only human for us to change our viewpoint on something as new circumstances and facts come to light. Unfortunately, once you receive your lump sum wrongful death payout, you can’t exactly give the money back. The agreement was made and fulfilled, so you really can’t change it.  However, you can still set yourself up with something similar to a structured settlement payout if you choose to do so at a later date. To do that, you just need to purchase an annuity with your lump sum. You get to decide the terms of the annuity, similar to a structured settlement. Aren’t Sure Which Direction to Go with Your Wrongful Death Settlement Payout? If you are planning to file a wrongful death claim and aren’t sure how you want to receive your settlement, we at The Zimmerman Law Firm can help. We will review your case with you, go over your financial needs and circumstances, and help you make the right decision for you and your family. Wrongful death claims are always difficult for families, so at The Zimmerman Law Firm, we always take a compassionate approach with our clients. Our goal is to make sure you get everything you need to set yourself up for the future. That’s why we always have someone available to answer your questions. If you want to see if we are a good fit for your needs, contact us today for an entirely risk-free consultation. From there,...

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| Read Time: 3 minutes | Wrongful Death

Elements of a Texas Wrongful Death Claim

A legal claim for wrongful death can be brought by loved ones seeking justice and financial relief on behalf of a loved one who passed away due to the negligence of another party. This cause of action is not applicable to every accidental death situation. Specific wrongful death elements must be present to succeed on this legal claim.  In Texas, wrongful death occurs when the injured person would have had the right to file a personal injury lawsuit if they had lived. This also applies in the case of an unborn fetus.  Wrongful Death Elements There are four elements to this cause of action that the plaintiff must prove to win a lawsuit. These are similar to the elements that must be established for Texas personal injury claims. Each wrongful death element is crucial to the case. Under Tex. Civ. Prac. & Rem. Code §§ 71.001 to 71.003, if all elements of wrongful death are present, loved ones are entitled to damages.  Duty The first element of a wrongful death claim is that the defendant owed a duty of care to the person who died. One example of duty of care is the duty to obey traffic safety laws such as stopping at a red light, or not texting while driving. Breach of Duty You must next prove that the defendant breached their duty. A breach of duty occurs when a party fails to behave with the level of care that a reasonable person would exercise in a similar situation. Causation The causation element of wrongful death requires you to show that the death was caused by the breach of duty. There are two types of causation: Cause in fact means that the death would not have occurred but for the defendant’s actions; and Proximate cause means that the act was a foreseeable consequence of the defendant’s breach of duty. “Fault” is another way to think about the wrongful death element of causation.  Damages Finally, the negligent party’s actions must have caused damage. In the case of a wrongful death claim, the damages you must prove are those suffered by the loved ones of the deceased person as a result of the death—for example, loss of financial support and loss of companionship. Who Can File a Wrongful Death Lawsuit in Texas? A handful of people are permitted to file a wrongful death lawsuit. These include the decedent’s surviving spouse, children, and parents.  If none of these surviving relatives files the suit within three months of the death, a personal representative of the estate may file the claim instead. The Texas wrongful death statute of limitations give you two years to file the claim after the death of your loved one.  Proving the Elements of a Wrongful Death Suit Keeping accurate records of all the events surrounding the death of your loved one is the first step in building a successful case that meets all wrongful death elements. This includes accident reports, medical records, autopsy reports, and more. These documents can be difficult to compile as well as heartbreaking, but they are necessary. Your legal team will be able to guide you through this process, as well as conduct an investigation to determine the defendant’s level of culpability.  Our legal team at The Zimmerman Law Firm has over 85 years of combined experience representing clients with their personal injury and wrongful death cases. We can help you determine the value of your claim and the best way for you to get the compensation you deserve. Contact us for your free consultation.  FAQ What Are the Elements of Wrongful Death in Texas? There are four elements of wrongful death. These elements include duty, breach of duty, causation, and damage. Each element must be present to bring a cause of action.  Who Can File a Wrongful Death Lawsuit in Texas? The decedent’s surviving spouse, children, and parents are all eligible to file a wrongful death lawsuit in Texas. If these surviving family members do not file within three months of the death, a personal representative of the estate may file the claim instead. How Can an Attorney Assist in Your Wrongful Death Case? An experienced wrongful death attorney will determine the value of your case, investigate the death, gather proof of the negligent action that caused the death, negotiate with insurance companies, timely file paperwork, and represent you at trial if necessary.

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| Read Time: 3 minutes | Wrongful Death

Average Wrongful Death Settlement: What to Expect

If you have experienced the loss of a loved one due to the negligence or recklessness of someone else, you may be entitled to compensation for wrongful death. The amount you are eligible to receive will depend on a number of factors. There is no real way to determine the average wrongful death settlement because the circumstances of death are unique to each case. However, a personal injury lawyer can help you estimate the value of your claim. What Is Wrongful Death? A claim for wrongful death compensates the close family members of a deceased person for losses they experience as a result of their loved one’s death. To have a valid cause of action, the action or inaction that resulted in death must have been intentional or negligent. The action must have been the cause of or a contributing factor to the death of your loved one.  Potential Compensation for Wrongful Death Cases Compensation for wrongful death takes into consideration the impact of death on survivors. Damages can be both economic and noneconomic. Exemplary damages (also known as punitive damages) may also be available in egregious cases. Economic Economic damages are those that can be proven objectively using bills and invoices. Costs covered may include: Funeral and burial expenses;  Loss of decedent’s expected earning capacity;  Loss of benefits such as medical insurance coverage or pension plans;  Loss of inheritance; and Value of any goods or services that would have been provided.  Most estimated wages and benefits are calculated through the decedent’s intended retirement age. Non-Economic Damages that don’t come with a written cost are harder to prove but still just as valid. Non-economic damages attempt to place a value on the mental and emotional components of wrongful death. Non-economic damages may include: Mental anguish; Post-traumatic stress; Loss of the care, protection, and guidance from the deceased;  Loss of household services of the deceased; Loss of love and companionship; and  Loss of consortium.  Non-economic damages may require witnesses and expert testimony to prove that the damage occurred. Exemplary Damages Egregious behavior may be costly. An additional payout in the form of exemplary damages may be required to punish a defendant. These damages are most likely in cases where the defendant is a big corporation that would be undeterred by a small payout. But they could be available any time intentional conduct or gross negligence is involved, such as in the case of an accident caused by a drunk driver with repeat offenses.   Examples of Average Wrongful Death Settlements Wrongful death claims can come in all shapes and sizes. Who you are bringing the claim against will also impact average wrongful death settlement amounts.  A Texas court awarded a $9,360,000.00 verdict in 2019 against the City of Austin doing business as Austin Energy. The company was found negligent in operating and maintaining high voltage power lines that ran dangerously close to the side of a nightclub. This negligence resulted in the electrocution that killed Jaime Membreno. ​​ In 2019, Greyhound Bus was ordered to pay $20,000,000 for the wrongful death of a 25-year-old Texas resident who was hit while trying to get the driver’s attention to board the bus. The driver erred when he left the bus stop prior to the scheduled time and did not conduct a headcount.  A $4,500,000 wrongful death settlement was negotiated with Bexar County, Texas, in a lawsuit involving the fatal 2017 shooting of a 6-year-old caught in police crossfire. The person the police were seeking entered the home of the boy’s family without invitation. Officers thought she was armed and opened fire.  Factors That Impact Your Wrongful Death Settlement The amount of compensation you receive for your wrongful death lawsuit will depend heavily on the circumstances of the case including:  How the death occurred: Who was responsible: The degree of responsibility for the death; Other factors contributing to death; The age of the deceased; Salary and earning potential of the deceased; and Financial dependence of family members. If the death of your loved one was caused by the negligent or wrongful actions of an individual, your settlement may be different than if it had been caused by a large corporation.  Hiring a Wrongful Death Attorney The experienced team at The Zimmerman Law Firm has been fighting for the rights of central Texans since 1962. We understand how difficult it is to handle legal matters when you are grieving. Every case is important to us, and our team is dedicated to providing each client with individual attention and compassionate representation.   Do not settle for less than what you deserve for your wrongful death lawsuit. You have already been through enough. We’re here to help, and we don’t recover unless you do. Contact The Zimmerman Law Firm for your free case evaluation.

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| Read Time: 4 minutes | Wrongful Death

What Is the Texas Wrongful Death Statute of Limitations?

Losing a loved one is devastating, especially when it is the result of someone else’s careless actions.  If you have lost someone you love due to the negligence or wrongful act of another, you may be entitled to relief. A wrongful death lawsuit in Texas can provide you with the compensation you need to begin the process toward recovery.  The Texas wrongful death attorneys at The Zimmerman Law Firm are standing by and ready to help you through this difficult time. Call (254) 752-9688 or fill out our online form to get started. Texas Wrongful Death Statute: An Overview Texas law defines wrongful death as the “wrongful act, neglect, carelessness, unskillfulness, or default” that causes the death of another person. While the definition appears relatively simple, proving a wrongful death claim can be more complicated than it might seem.  The most common type of wrongful death action is based in negligence. To prevail on a negligence claim, you must prove the existence of these four elements: Duty The first element of a negligence claim is proving the existence of a legal “duty.” This means you must show that the opposing party owed your loved one a duty to use reasonable care to reasonably prevent harm under the circumstances. Breach Next, a plaintiff in a wrongful death action must show that the opposing party breached their duty. This means that you must prove that the opposing party did not act as a reasonably prudent person would have under the same circumstances.  Examples of a breach of a legal duty in a wrongful death lawsuit might include: A driver speeding or failing to adhere to posted traffic regulations; A doctor not providing the level of care expected of someone of their skill and experience; or A business owner failing to ensure that no hazardous conditions exist on their premises. This is by no means an exhaustive list. Contact an attorney today to discuss whether a party breached their duty to your loved one. Causation Third, you must show that the opposing party’s breach was the cause of your loved one’s death. This causal link can be one of the most difficult elements to prove. You have to prove that your loved one’s death occurred because the opposing party breached his or her duty. Damages Lastly, you must prove that damages exist. Damages in a wrongful death action are those suffered by the victim’s loved ones. Examples might include:  Lost earning capacity of the deceased; Loss of or diminished inheritance; Lost care, support, companionship, and love of the deceased; and  Pain, suffering, and mental and emotional anguish caused by the deceased’s death. Some of these damages may be hard to quantify. However, an experienced attorney can help you calculate your potential Texas wrongful death damages in an effort to maximize your recovery.  Who Can Bring a Wrongful Death Lawsuit in Texas? One important thing to note about wrongful death claims is that not all loved ones may bring one. Only certain people may file a wrongful death lawsuit in Texas. Specifically, Texas law states that the surviving spouse, children, and parents of the deceased are entitled to bring a suit for wrongful death. These are the only parties that may bring such an action. Thus, even close friends, siblings, or grandparents of the deceased are not permitted to file a wrongful death lawsuit in Texas.  However, if none of the statutorily permitted family members bring a wrongful death suit within three months of the death, the administrator of the deceased’s estate may then bring the suit. Texas Wrongful Death Statute of Limitations The statute of limitations in Texas for a wrongful death lawsuit is two years. But what exactly does this mean?  What Is a Statute of Limitations? A statute of limitations is a statutory time period in which you must file a legal action.  The Texas wrongful death statute of limitations is two years from the date of the victim’s death. This means that you must file your wrongful death lawsuit in Texas within two years after the death of your loved one.  Failure to do so within the Texas wrongful death statute of limitations deadline can result in losing your right to bring your claim at all.  Are There Any Exceptions to the Texas Wrongful Death Statute of Limitations?  In most cases, a wrongful death suit must be brought within two years of the date of the victim’s death. However, there are a few limited exceptions to this two-year timeframe.  These exceptions include situations in which: The plaintiff of the wrongful death suit is under the age of 18 at the time of the death; The defendant’s negligence was not known and could not have been discovered during the two-year time period; The plaintiff of the wrongful death suit has a mental or physical impairment that prevented the filing of the suit within the two-year period; or The defendant committed fraud. An experienced Texas wrongful death attorney can help you determine whether an exception exists and how this might impact your ability to bring a lawsuit.  Contact a Texas Wrongful Death Attorney Today If you have questions about the Texas wrongful death statute of limitations and how it applies to your case, contact an experienced Texas wrongful death lawyer today. An attorney can help you evaluate your case, assess your claims, determine what damages you might be entitled to, and fight for your rights at every step along the way. At The Zimmerman Law Firm, we know just how difficult it is to deal with the loss of someone you love. That’s why we work tirelessly to provide you with the support and representation you need and deserve.  We pride ourselves on the personal attention we are able to provide to each and every one of our clients. Your case is important to us, and we want you to know that you will be a priority with our team.  Contact or call (254) 752-9688 today for your free case review to...

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