How Are Wrongful Death Settlements Paid Out in California?

Wrongful death settlements can reimburse a grieving family for financial losses related to a loved one’s death, including funeral bills and medical expenses. Receiving a wrongful death settlement is similar to the process of a personal injury claim in California, with a few key differences. Understanding how wrongful death settlements work could help prepare you and your family for the process ahead.

How Are Wrongful Death Settlements Paid Out in California?

What Damages Are Available for Wrongful Death?

Damages can refer to the losses your family suffered because of the wrongful death in California, as well as the financial compensation you could receive through a settlement or trial verdict. While each claim is unique, the same standard types of damages available remain the same from case to case in California.

  • Funeral and burial expenses
  • Lost inheritance
  • Loss of consortium
  • Pain and suffering

You cannot obtain punitive damages for wrongful death in California. Many families pair wrongful death claims with survival actions. A survival action serves to reimburse the estate for losses the deceased loved one suffered, while a wrongful death lawsuit compensates survivors for their losses. A survival action could compensate an estate for lost wages, medical bills and personal property damages the victim incurred.

How Much Is the Average Settlement Worth?

It is difficult to estimate an average settlement amount for wrongful death claims. Families and their expenses vary greatly, as do the circumstances of each case. Some claimants in California receive $10,000 or less through wrongful death insurance claims, while others achieve six- or seven-figure trial verdicts. The only way to obtain an accurate estimate of what your wrongful death claim might be worth is through a conversation with an attorney.

Who Receives a Wrongful Death Settlement?

In a wrongful death claim, surviving loved ones generally receive any settlement money won. This could be a spouse, domestic partner, children, grandchildren or others who were dependent on the decedent for support. The courts may divide a settlement award among multiple surviving loved ones, if necessary. In a survival action, a settlement won will go to the estate, either to pay off its debts or for distribution according to the estate plan.

How Long Does it Take to Achieve a Wrongful Death Settlement?

Most wrongful death cases reach settlements without needing trials. A straightforward wrongful death insurance claim takes about one to three months to settle, on average. In California, insurance companies have a maximum of 40 days from receiving a wrongful death demand letter to respond. They may take longer, however, if they need more time for an investigation or claim review. If your claim has complex factors or if insurance settlement negotiations fail, you may need to pursue compensation through a wrongful death trial instead. A trial could take much longer to complete – a year or more on average.

What Is a Structured Settlement?

If you achieve a positive outcome for your wrongful death claim, the insurance company may offer either a lump-sum payment or a structured settlement. A lump sum is more common: you will receive payment in full for your damages in a single sum, all at once. You may use the lump-sum settlement check to pay for your loved one’s final expenses.

A structured settlement is one in which the insurance company pays over time, in increments. Your family could use it to pay for long-term losses from wrongful death, such as a reduction in household earnings. You generally cannot change the terms of a structured settlement once you accept, however; have an attorney review the settlement agreement first.

Do You Have to Pay Taxes on a Wrongful Death Settlement?

In most cases, you do not have to list your wrongful death settlement as earned income on your taxes. Under federal tax law, settlements obtained for physical illness, injury or death are nontaxable. One exception, however, is if you previously listed your deceased loved one’s accident-related medical expenses as a deduction when filing your taxes. In this case, you would have to pay taxes on the medical portion of your wrongful death settlement. Work with a Sacramento personal injury lawyer to fully understand the taxation of your wrongful death settlement.