Understanding How Wrongful Death Settlements Are Paid Out

Filing a wrongful death lawsuit can be a grueling experience; nothing about losing a loved one is easy, but it can be especially painful if their death is a direct result of someone’s negligence or carelessness. Suing for emotional or other damages can help bring a sense of justice, pay for funeral arrangements and generally provide a sense that something good came out of something terrible.

Many cases don’t get as far as a trial, and for those who do, it’s likely that a judge won’t require the defendant to pay out damages. If you are able to win damages, however, it is important to know how your damages will be paid out, as a wrongful death attorney, like from David & Philpot, P.L., can explain. This will help you prepare for what receiving damages will actually look like.

Payment Types

In most cases, a wrongful death settlement will be paid out by either the at-fault party’s insurance or the at-fault party themselves. In either case, there are two types of payment plans that happen in wrongful death suits.

Lump-sum payments are what most people think up when they imagine receiving damages from a lawsuit. This type of payment is self-explanatory: The plaintiff (the person or estate suing on the deceased person’s behalf) is awarded a sum of money that is paid all at once. This is very common in cases that get settled out of court. Instead of going to trial, the at-fault party agrees to pay a lump sum in order to stop the lawsuit. For plaintiffs that are seeking damages in order to pay medical bills or other expenses related to their relative’s death, this kind of payment can be ideal.

Structured settlements are the other common payment type seen in wrongful death suits. This payment structure provides more support over a long period of time; payments are usually paid out monthly and are dispersed among each of the people involved in the suit.


Whichever payment method the court decides on, it is important to know that damages received in a lawsuit are, generally speaking, not taxable. IRS rules do not require taxes to be paid on damages since they are specifically awarded to compensate for injury or emotional distress. Depending on the circumstances of your case, you may receive damages that qualify for being taxed if they are not specifically being awarded for punitive damages. If you need clarification on the tax status of your damages, contact a wrongful death lawyer to help.