how are wrongful death settlements paid out

If a person dies due to a workplace injury, medical malpractice, or elder abuse, their family has the right to seek a wrongful death settlement. They can collect damages for the losses that they have suffered financially and emotionally as a result of their loved one’s untimely death. You may be wondering, “how are wrongful death settlements paid out?” 

It is challenging enough to attain a settlement, but many people do not understand how these settlements are paid out to the surviving family. This can lead to errors that may end with them losing some or all of the money they are entitled to.

Don’t lose the damages you won due to an error. Hire a wrongful death lawyer who will help you collect the compensation you are owed.


What is a wrongful death settlement?

A wrongful death settlement or verdict is the determination resulting from a wrongful death claim. Wrongful death claims are filed when a person is killed due to someone else’s negligence or intentional harm.

Our expert attorneys have helped victims file wrongful death suits for:

  • Car accidents
  • Nursing home neglect
  • Workplace injuries
  • Slip and fall deaths
  • Medical malpractice
  • Product liability


The plaintiff seeks damages to recover the expenses of their financial and emotional losses. The wrongful death settlement is the money that they are awarded when they win their case.


How are wrongful death settlements paid out?

Wrongful death settlements are typically paid out in one of two ways: lump-sum payment or structured settlement.



Lump-sum payments allow you to receive the full sum of your wrongful death settlement damages at one time. This means that you get all of the money at once so you won’t have to chase the liable party or their insurance company for any additional funds later on.

Getting a lump sum payment is preferable for many victims who need the money to immediately pay off medical bills without accruing interest or damaging their credit score. However, not every defendant will be able to pay out their damages this way. Some do not have the money immediately or need time to liquidate assets. 


Structured Settlement

A structured settlement is a method of receiving regular, ongoing payments on a schedule that you set. Typically, these are monthly payments.

It takes longer to recover your damages with a structured settlement, meaning that you’ll be delayed in being able to pay off your expenses as quickly as you’d like. Many structured settlements do not account for interest charges that you will accrue.

You are more likely to receive a structured settlement if the liable party is an individual, like an at-fault driver, rather than a corporation, such as an insurance company.


Who can be awarded a wrongful death settlement?

Wrongful death settlements in Florida are restricted to the direct family and dependents of the deceased. This means that spouses and children may bring a wrongful death lawsuit against a defendant. The deceased’s parents and siblings may also bring forward this lawsuit.

Failing the above, the deceased’s estate may be able to file a lawsuit on their behalf; however, all awarded damages will be returned to the estate and not to the individual who files the suit. 


How are wrongful death settlements distributed?

Wrongful death settlements rarely go to one individual outright. Typically, they will need to be divided among multiple parties. 

To begin, debts owed to hospitals and other providers are paid out first. This ensures that necessary fees are dealt with before any individuals benefit.

Settlements are not always paid out equally. Depending on the individual’s relation to the deceased, it may be determined that they should receive more than an equal portion of the settlement. For example, a spouse is likely to receive more than an adult child. This is due to the fact that they would have suffered more losses around their home, especially with regards to income and home maintenance.

To ensure that your wrongful death settlement is distributed fairly, contact a wrongful death lawyer. They will represent everyone’s interests to determine the fairest allocation of the funds.


Are wrongful death settlements taxed?

Wrongful death settlements are compensatory, which means that they cover both your economic and non-economic damages. In some cases, they may be taxed.

The IRS typically doesn’t tax wrongful death damages from a settlement, but they may tax certain portions of the settlement. For example, if any of the settlement passes through the deceased’s estate, it can be taxed via probate.

However, punitive damages are taxable. They count as other income according to the IRS. This means that they will be added to your annual income, which can put you in a higher tax bracket and raise your overall taxes.


Wrongful Death Settlement Amounts

There is no clear average amount for wrongful death settlements. Every case is different, so there is no specific number that can be given to individuals considering filing a wrongful death case.

Some cases settle for tens of millions of dollars, while others may settle for under one million.

Wrongful death settlement amounts are impacted by:

  • The severity of the negligence
  • Victim’s suffering
  • If they had dependents
  • Cost of medical bills


Speak to a Wrongful Death Lawyer Today

Losing a loved one is extremely challenging. You’re likely to feel depressed, angry, and worried.

Our expert wrongful death attorneys at Lytal, Reiter, Smith, Ivey & Fronrath will help you manage your case and build the strongest claim for compensation. Let us worry about court deadlines and insurance companies while you focus on processing your loss.

Reach out to us for a free consultation to get our help today.