Wrongful Death Damages: Taxable or Not?

The death of a loved one takes on a certain sting, which is often worse when the death could have been prevented. If you suffered the loss of a loved one because of negligent acts of another person or company, you may be entitled to wrongful death damages. If you receive damages, will you owe a large amount of taxes, making it not worth your time to fight it in the first place? The following breaks it down.

Compensatory Damages

Chances are you weren’t planning on your loved one passing away, and as such, you may not have financially planned for the funeral costs. Perhaps your loved one suffered physically and emotionally before the death because of the negligent acts. If your wrongful death lawsuit results in damages that are specifically to compensate you for those unforeseen costs surrounding your loved one’s death, they are not taxable. Those funds are to be used to pay for medical, therapy, funeral and other similar expenses.

Punitive Damages

Punitive damages are different than compensatory damages. If you were awarded a payout to cover your own emotional distress, lost wages or other punitive damages, it will typically be subject to taxes. Those types of costs are considered income, and as such are taxable just like any other income is. These damages are often awarded to plaintiffs in cases where the defendant was especially neglectful and the court feels they deserve a more harsh punishment.

When to File a Claim

The best way to know when you should file a claim is by talking with your attorney. Lay out all the details of your situation, allow the attorney to dig around a little bit to find more information and then get back together to discuss whether or not it would be beneficial to pursue. In many cases it will be worth the fight, but because a wrongful death attorney deals with these kinds of situations on a regular basis, he or she will know better.

Contacting Your Attorney

In the event of a wrongful death, often your best bet for obtaining money to pay for unforeseen costs is with the help of an attorney. Whether the individual who passed away was your sibling, your parent, your spouse or your adult child, you may be able to file and win a lawsuit. Contact a wrongful death lawyer today to determine whether or not you have a case, and to decide what you need to do next to move forward with the case.

 

Source: Wrongful Death Attorney Phoenix, AZ, Rispoli Law

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