Wrongful death settlements pay your family back for what you have lost after your loved one died. While it does not always seem right to substitute money for human life, it is the only way that you can get justice (assuming that there are no criminal charges filed). If you can settle your case, your family may have a legal right to receive a lot of money. This requires planning on your part, as you must make the first choices at the time of settlement
Your Options for Receiving a Wrongful Death Settlement
Families will need to decide how they want to receive a wrongful death settlement.
In general, there are two options for families to receive their money:
- As a lump sum payment – This is a one-time payment right after settlement
- In a structured settlement – This annuity gives you payments over time at set intervals
What works best depends on your family’s situation. Your lawyer can help you figure out what is important to you when you are making this decision. Each family has different financial considerations when settling a case. Wrongful death lawsuits usually lead to larger settlements, so you may be dealing with a considerable sum of money. If you are not prepared to receive this check, your family can have financial issues in the future.
There are many tales of families who burned through wrongful death settlements in a short time and did not have the money there when they needed it. Give some thought to your situation, so this does not happen to your family.
The Pros and Cons of a Lump-Sum Settlement
A lump sum gives you the settlement all at once. You do not need to wait for any of it. Your entire portion of your wrongful death settlement will hit your account immediately. If you have gone into debt while your legal case was pending, you can extinguish all of that debt. You may have been left with large medical bills or needed to borrow money to get by without your loved one’s income, including outstanding medical bills and credit card debt.
You may feel that you are better off with the money sooner rather than later. It can give you a sense of closure when your legal case completely resolves, and you receive a check. You can be better off financially if you can invest it rather than take it little by little. For whatever reason, that option is available to you. It is up to you how you take your settlement.
If you want a lump-sum payment, you can get it right after you sign the settlement agreement. This is a decision that you must think about carefully, taking the time to discuss all the considerations with your lawyer.
If you choose to negotiate a structured settlement, you may not get to dictate the terms. You have to agree on the settlement terms with the defendant and their insurance company. Inflation can eat away at your money over time if you do not negotiate the right rate for your annuity. At the same time, you can make more money over time if you negotiate the annuity well.
The Pros and Cons of a Structured Settlement
You may want a structured settlement. A spouse and children may share in the wrongful death settlement. When minor children turn 18, they may receive a large sum of money. They do not always have the responsibility to make the right moves with such funds. They are not always fully mature and may feel tempted to spend it quickly.
The same goes for anyone who gets a large sum of money all at once. Families may not always do what is right with the money. They may find themselves in the hole in the future because they have already settled their case, and they are now without their loved one’s financial support. A structured settlement will give your money in periodic payments, keeping you from spending it all at once. If the money is going to children, they will receive it in increments, so it is there for them in the future.
If you are negotiating the terms of a structured settlement, know you will need to live with them for as long as it takes to pay the money. If you realize in the future that you need more money than you get at once from a structured settlement, there is nothing you can do. You cannot change the terms of a structured settlement. In addition, you may not have enough money upfront to pay some of the debts that you incurred between your loved one’s death and the settlement.
How You Should Prepare to Receive Your Wrongful Death Settlement
Depending on the size of your wrongful death settlement, you should also consider meeting with other professionals before deciding how to receive your money.
You may want to talk with the following professionals before you get a large amount of money:
- A tax attorney – Wrongful death settlements are generally tax-free, but there may be tax implications in the future depending on what you do with the money.
- An estate planning attorney – You may use some of the money to establish trusts for certain people and take care of loved ones in the future. An estate planning lawyer will help you set up the actual trusts and advise you on which structure may work best.
- A financial planner – You may feel tempted to spend when you receive a large sum of money. A wrongful death settlement, in part, pays for lost wages that your loved one would have earned in the future. This is money that you may need, and you must manage it properly. A financial planner can help you budget for what you will need in the future.
- An investment adviser – You may consider making smart and sound investments, so your money can grow in the future faster than the rate of inflation. An investment adviser can counsel you on smart and safe ways to invest. You should avoid doing anything rash when investing your money because this is money that your family is relying on for years to come.
The Process for Receiving Your Wrongful Death Settlement Check
When it comes to the actual mechanics of payment, you will receive the money not long after you agree to a settlement. At first, you will negotiate the actual details of the settlement agreement. The defendant may not admit actual responsibility for your loved one’s death.
A settlement agreement may have terms that might include:
- A release of future claims
- Confidentiality provisions
- The amount of payment
- How you will receive the settlement
- Indemnification for the defendant for any potential liens on the settlement
Even after you agree on an amount, it may take some time to agree to the actual language. At the minimum, your attorney will need to review the language in the settlement agreement and make changes as necessary to protect your legal rights. The settlement agreement is more than just a formality, and the actual words matter.
Who Gets Money in a Wrongful Death Settlement
When it comes time for the actual payment of the money, the settlement agreement will state who gets what money.
In Texas, the following people can receive money in a wrongful death case:
- Surviving spouse
- Children
- Parents
If the family has agreed on how to divide the wrongful death settlement, there will be terms that dictate how much each person will get and how they are to receive their money. The surviving spouse will usually receive most of the money from a settlement. Lawyers will usually allocate the money based on how they think a jury might if the case was decided by a court.
What Must Happen for You to Get Your Check
Once you have agreed to the terms and the language of the wrongful death settlement, most of the heavy lifting is finished. At that point, there are only administrative details to handle before you can get your money.
Here is what happens between the agreement and the time that you receive a check:
- Before you can receive payment, you must sign a release agreement that stipulates that you will not file another claim against the defendant arising from this same case
- You will sign the agreement itself with a notary witness.
- The defendant or their insurance company will also need to sign the agreement.
- Once the agreement is signed, the insurance company will go through an internal process to write your check. This cannot take too long, but it can take days to a few weeks.
- The insurance company will transfer the money to the lawyer’s escrow account.
- Any party with a lien against the settlement check will receive payment from the money before you can get your proceeds.
- Your attorney will also take the percentage that they receive as part of the contingency agreement from the settlement proceeds.
- You will provide payment instructions to the attorney, and they will follow them in transferring you the money.
Your Damages in a Wrongful Death Settlement
When you are negotiating a wrongful death settlement, it is critical to get enough money to provide for your and your family’s needs in the future. You should also make sure that you get money to fairly compensate you for what you have gone through as a result of your loved one’s death. Depending on the circumstances, you may have suffered a great deal of distress because you have lost your loved one in an untimely manner.
This is what you are legally entitled to in a wrongful death settlement:
- Lost wages that your loved one would have earned for the rest of their career had they lived (when someone dies at a younger age, this part of the settlement can be larger)
- Payment for the loss of a relationship with your loved one
- Compensation for the loss of guidance and support that the family member would have provided
- Loss of consortium damages for the spouse
- Compensation for the emotional distress and grief you suffered because of the loss of your loved one
Why You Need a Wrongful Death Attorney for Your Case
As you can imagine, wrongful death lawsuit settlements may be larger than that in a standard personal injury case. You may also have a survival lawsuit at the same time, which compensates the estate for what your loved one endured between the time of their injury and death. It may take some time to negotiate the actual settlement because you are dealing with larger numbers. The insurance company may not make it easy for you to get a settlement, regardless of your circumstances.
They couldn’t care less about your family and what you are dealing with during a difficult time. It takes an aggressive and tenacious lawyer to make your case and get the insurance company to offer enough money to settle your case. The insurance company is only trying to make your case go away and pay as little as possible.
Hiring an attorney can keep your family from having to deal directly with the difficult details during a tough time. Your lawyer will not only deal with the insurance company on your behalf, but they will also handle the administrative work that goes along with your claim. In addition, an attorney will advise you on the mechanics of a wrongful death settlement and what you may need to consider before reaching an agreement.
As you can see, it is not always as simple as signing the agreement and getting a check. Your family needs to prepare to get the money because getting what might be millions of dollars all at once may change things right at the time that you are dealing with your grief.