Wrongful Death Structured Settlements for Family Members Who Need Monthly Income
Structured settlements are designed to provide financial stability and security, helping families cope with the loss of a loved one and manage their ongoing expenses.
Understanding Wrongful Death Structured Settlements
What is a Wrongful Death Structured Settlement?
A wrongful death structured settlement is a financial arrangement where compensation from a wrongful death lawsuit is paid out over time through periodic payments. These payments can be customized to meet the specific needs of the surviving family members, providing a steady income stream to cover expenses such as funeral costs, medical bills, lost wages, and emotional suffering.
How Wrongful Death Structured Settlements Work
1. Establishing the Settlement
When a wrongful death lawsuit is resolved, either through a court judgment or a settlement agreement, the compensation is typically awarded to the surviving family members. Instead of receiving a lump sum, the family can opt for a structured settlement, where the compensation is distributed over time through regular payments.
Example: Maria's husband was killed in a car accident caused by a negligent driver. Maria filed a wrongful death lawsuit and, through a structured settlement, she receives monthly payments to support her and her children. This ensures that Maria has a steady income to cover household expenses and future financial needs.
2. Annuity Purchase
The defendant or their insurer purchases an annuity from a reputable insurance company. This annuity funds the periodic payments to the surviving family members, ensuring that the payments are reliable and secure. The annuity is designed to provide payments for a specified period or for the lifetime of the beneficiary.
Example: John, who lost his wife due to medical malpractice, receives an annuity that guarantees annual payments for the next 25 years. This arrangement helps John cover his living expenses and secure his children's education.
3. Customized Payment Schedule
Structured settlements offer flexibility in designing the payment schedule to meet the unique needs of the family. Payments can be made monthly, quarterly, or annually, and can include larger lump sum payments at specific intervals to cover significant expenses.
Example: Sarah's structured settlement is customized to provide monthly payments for day-to-day expenses, with additional lump sum payments every five years to help with larger costs such as her children's college tuition.
Benefits of Structured Settlements for Surviving Family Members
1. Financial Security
Structured settlements provide a reliable source of income, ensuring that surviving family members have the financial support they need to cover ongoing expenses and maintain their standard of living. This is particularly important for families who have lost the primary breadwinner.
Example: Tom, who lost his partner in a workplace accident, receives monthly payments that help him manage household expenses, childcare costs, and other living expenses, providing him with long-term financial security.
2. Tax-Free Payments
Payments received from wrongful death structured settlements are generally tax-free. This provides significant financial relief, as the family does not have to worry about federal income tax on the payments they receive.
Example: Linda's structured settlement provides her with $2,000 per month, tax-free. This helps her manage her household budget and cover her children's needs without the burden of taxes.
3. Protection Against Financial Mismanagement
Receiving periodic payments instead of a lump sum helps protect surviving family members from the risk of spending their settlement funds too quickly. Structured settlements ensure that the funds are used responsibly over time, reducing the risk of financial instability.
Example: Michael's structured settlement provides him with quarterly payments, helping him manage his finances effectively and ensuring he has a consistent income to support his family in the long term.
4. Peace of Mind
The assurance of regular, tax-free payments provides peace of mind for surviving family members. Knowing that their financial needs are met allows them to focus on healing and rebuilding their lives after the loss of their loved one.
Example: Jane, who lost her husband in a tragic accident, receives a structured settlement with monthly payments. This steady income helps her maintain her household, support her children, and focus on their emotional recovery without financial worries.
5. Customized Financial Planning
Structured settlements can be tailored to meet the specific needs and circumstances of the family. This includes varying the payment amounts, incorporating lump-sum payments at certain intervals, and adjusting for inflation to ensure that the payments retain their purchasing power over time.
Example: Emily's structured settlement is tailored to provide increasing annual payments to account for inflation. Additionally, she receives larger lump-sum payments every few years to help with major expenses such as home renovations and vehicle purchases.
6. Enhanced Negotiation Leverage
The option to structure a wrongful death settlement can enhance the negotiation leverage of both the plaintiffs and defendants. For defendants, offering a structured settlement demonstrates a commitment to providing long-term support to the family. For plaintiffs, structured settlements provide a clear and predictable financial plan, making it easier to achieve a favorable settlement.
Example: During settlement negotiations in a wrongful death case, the defendant proposes a structured settlement that offers monthly payments for life. This proposal reassures the surviving family members that they will receive ongoing financial support, facilitating a more favorable settlement outcome.
Conclusion
Wrongful death structured settlements provide significant financial advantages and security for surviving family members who require monthly or annual income. By offering a steady income stream and tax-free payments, these settlements help families manage their ongoing expenses and maintain their standard of living after the loss of a loved one. The flexibility and customization options available with structured settlements make them a valuable option for securing long-term financial stability and peace of mind.