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How Are Wrongful Death Settlements Paid?

Texas Wrongful Death LawyerWhen someone dies as a result of another person or entity’s negligence or wrongdoing, the deceased person’s family can bring a wrongful death lawsuit against the negligent person or entity. Under Texas law, wrongful death claims can stem from neglect, carelessness, unskillfulness, and default.

In the case of an injury, the at-fault party may be legally required to pay damages to the injured person. But if the injury has resulted in a death, damages may instead be due to certain beneficiaries or to the deceased person’s estate.

How are the settlements in wrongful death cases paid? To find out, we first need to briefly review the parties eligible to bring a wrongful death lawsuit in Texas and the types of compensation they are eligible to receive.

Who Can Bring a Wrongful Death Lawsuit?

The law in Texas is very specific about who can bring a wrongful death lawsuit. It can be brought by the following people, individually or together:

  • The surviving spouse;
  • Children, including legally adopted children and adult children; and
  • Parents.

If a wrongful death lawsuit isn’t filed by any of these survivors within three months after a person’s death, either the deceased person’s personal representative or the executor of the deceased person’s will can file a claim on behalf of the estate.

What Damages Can These Parties Seek?

The damages available depend very much on the support family members received from the deceased person and the circumstances of the death. Wrongful death damages can be sought to compensate family members for the loss of the deceased and the support they received from the deceased, both actual and prospective. Damages can thus be sought for economic losses, such as the income the deceased would have earned had they lived and the inheritance the beneficiaries may have lost because of the person’s untimely death.

Damages can also encompass noneconomic losses, such as lost companionship, love, comfort, support, services, advice, counsel, and maintenance, as well as mental and emotional pain, anguish, and suffering.

How Are Settlements Paid?

Most wrongful death settlements are paid by the at-fault party’s insurance company. The insurance company will issue checks to the beneficiaries once negotiations are complete.

Wrongful death settlements are not usually taxable if they are what the law terms “compensatory”; that is, meant to compensate survivors for pain and suffering connected with the loss.

However, occasionally wrongful death claims include punitive damages. These are meant to punish the defendant for serious and sustained wrong-doing. Under certain circumstances, punitive damages can be taxed.

A wrongful death settlement should clearly specify the type of damages being paid, whether compensatory or punitive.

Who Receives the Settlement?

Because wrongful death lawsuits can be filed by several parties individually, or can include several people even if filed together, there is a question of how settlements are paid. If a wrongful death settlement totals $1 million, for example, and there are several claimants, what is the determinant of the settlement for each claimant?

The answer is: it depends. How wrongful death settlements are paid depends on several factors. Several core concepts need to be addressed, including whether the award should be divided equally or whether some plaintiffs deserve a higher proportion of a successful claim.

Minor Children

If minor children are beneficiaries of a wrongful death claim, the court generally appoints someone to represent each child’s best interests, called a guardian ad litem. The guardian ad litem is charged with making sure the child is provided for fairly.

Let’s say a 35-year-old divorced father has died, leaving two children under the age of 10. Both children are his beneficiaries. So are his parents. His former spouse is estranged, and did not join the lawsuit. A guardian ad litem may argue that an equal division of the claim between the two children and two grandparents isn’t in the children’s best interests.

Why? Because, although the deceased man’s parents may well have experienced anguish and suffering as a result of his death, they likely have not lost the income the deceased would have earned had he lived, nor have they lost an inheritance. The purpose of a wrongful death lawsuit is to compensate family members for the loss of financial support they would otherwise have received from the deceased. It’s reasonable to assume that 10-year-old children living with their father would have been economically supported by his wages and may have inherited from his estate had his life not been cut short.

In addition, young children are very likely to have lost the deceased’s support, counsel, advice, and so on, and to require monetary compensation for these noneconomic losses. His parents may have lost these things as well, but not to the same degree as the children.

In this sort of case, the beneficiaries must arrive at an agreement for just compensation.

If the parties brought a lawsuit together or brought them separately but can work out an apportionment that satisfied them all, attorneys can work with all parties to negotiate an agreement. It is then put into contract form.

What Happens If Conflicts Arise Between Beneficiaries?

At times, conflicts may arise when beneficiaries attempt to work out how to apportion the compensation in a wrongful death case. Say, for example, that the wife in the above case is not estranged, but the two were recently divorced and she did not have custody of the children. She could also bring a wrongful death claim for lost wages and lost inheritance.

In this case, the guardian ad litem should advocate for the best interests of the children, just as they are charged with doing in all wrongful death cases.

But what if the grandparents have custody of the children according to the deceased’s will? They may well negotiate for a greater share of both economic losses and noneconomic losses than the wife, because the father’s financial and economic support had he lived would have gone to the children rather than to the wife.

Cases in which there is a conflict between the parties in determining a just apportionment can be complicated. It makes a difference whether the parties in conflict brought their cases separately or together. If they brought them separately, they will each have a case against the defendant, and won’t necessarily know the results of the other beneficiary’s cases. If they brought a claim together, they or their attorneys can negotiate amongst all parties until a just settlement is agreed upon.

If you need further information about wrongful death claims in Texas, contact an attorney today.

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