Wrongful Death Settlements and Taxes

If you have recently received a settlement from a wrongful death lawsuit, you may have concerns regarding how this will affect your tax situation at the end of the year. Because my of these settlements include large amounts, those who have been awarded damages may fear that it will cause them to owe a large amount of tax on the proceeds. However, many wrongful death settlements are not taxable by the IRS.

What Is Wrongful Death?

Wrongful death occurs when someone’s life has ended as a result of a person or company’s negligence or misconduct. The surviving family members may file a lawsuit against the person or company, claiming that they were responsible for the decedent’s demise. The case may be settled outside of court, or a judge may have the final say when it comes to awarding damages.

Federal Regulations

Per the IRS, if you receive proceeds from a lawsuit due to physical illness or injury, those funds are non-taxable. Wrongful death settlements are included in this because it is the physical illness or injury caused by an outside party that resulted in death. For this exemption to apply, however, the settlement is required to be in the form of compensation awarded for the pain and suffering caused. This is known as compensatory damages. These damages are specifically meant to compensate someone for a loss that has already happened.

Punitive damages, however, are subject to income tax. Punitive damages are awarded when the liable person or organization was found to have intentional, reckless, or negligent actions that led to the victim’s death. These types of damages are meant to serve as a penalty of sorts to deter similar acts in the future.

Federal Tax Return

As mentioned previously, compensatory proceeds are not subject to tax. As such, they do not affect your federal tax return. However, if you receive compensation for other damages, those payments are subject to income tax because they are considered income. Examples of awarded damages that may be subject to income tax include:

• A portion of the settlement that was awarded due to the emotional distress caused to the family
• A portion of a settlement that was awarded for punitive damages
• A portion of a settlement that was awarded to cover lost wages

If someone you love has recently passed away and you believe it was due to the negligence or intentional acts of another party, be sure to contact a qualified wrongful death attorney, like a Wrongful Death Lawyer in Salt Lake City, UT, to discuss your options.

Thank you to the experts at Rasmussen & Miner for their insight into wrongful death and the law.

When people think of the word “asbestos”, their memory may stir up television ads that talk about the harmful effects of asbestos and the illnesses that can develop due to exposure. While commercials aren’t always very intriguing per say, it is important for homeowners to be aware of what asbestos is and what they can do to identify it in their own home. Read on more about how to keep yourself and your family members safe. 

The History of Asbestos

There are both good and bad minerals, and asbestos is definitely categorized under the former. Asbestos is defined as the set of minerals that are known for being resistant to electricity, heat, and fire. These minerals are more controlled now, but they formerly were widely used in products related to building insulation and around-the-house appliances.

Ever since the 1970’s, when people began realizing how harmful asbestos was, it has since been utilized much less. Governments have established bans or use limitations around the globe, in both consumer and industrial products.

It is important to note that despite these new regulations, asbestos is still something that should concern homeowners. There are products that can still be made with up to 1% asbestos minerals. And, new regulations have failed to address what homeowners should do about homes they purchase that were built before the 1970’s, and the risk this could pose to the well being of their family.  

How Asbestos Enters the Body

Asbestos becomes a health risk when it turns into a dust-like, microscopic form and is released into the air. When people are exposed to asbestos, it’s usually due to inhaling these tiny specks. If asbestos is found in your home and won’t be disturbed unless you do a home renovation project, then it may be best to just leave it alone or have a professional remove it properly.

If you aren’t doing a home project anytime soon but want to know whether asbestos is in your home, keep an eye out for:

• Cracked siding
• Broken shingles
• Old cement roofing
• Cracked or discolored tiles
• Fraying piping insulation
• Crumbling Drywall

What to Do Next

Let’s say that you believe you’ve identified asbestos somewhere in your home. Refrain from touching or messing with the material, then contact a licensed and reputable asbestos abatement contractor in Los Angeles, CA to visit your home and sample the area. As stated above, asbestos is only dangerous after it’s been damaged or disturbed, so it’s best to hire someone to do a home inspection for you. Even though you cannot see asbestos in the air because of how tiny the material, never underestimate the long-term effects it could have on health. 

Asbestos exposure is serious and prompt action should be taken if there are any symptoms of illness. If you or any family members are experiencing these symptoms of asbestos exposure, go the the doctor right away:

• Chest pain
• Shortness of breath
• Unrelenting dry cough
• Chest tightness
• Nail deformities
• Finger clubbing
• Appetite loss

Thanks to Nielsen Environmental for their insight into asbestos and how to identify it in your home.

When you’ve lost someone you love as a result of negligence, no amount of money can ease your pain and suffering. The law does allow you to file a suit against the responsible party, however, to recover damages to ease the financial burden. Most settlements that are received for a successful wrongful death claim are tax-free. There are some exceptions, however, where some taxes will be due. If you have questions regarding wrongful death claims and taxes, make sure to contact a wrongful death attorney who can advise you of the laws in your state.

Compensatory and Punitive Damages

According to the IRS, proceeds that are awarded for injury or physical illness – including wrongful death – are not taxable. For this exemption to apply, however, the damages awarded must be compensatory in nature. That means it must be awarded for any pain and suffering caused as a result of the decedent’s death. Because compensatory damages are not considered “gainful,” they are exempt. They are meant to return your life to the way it was before, financially.

In some cases, a portion of your damages may be taxable, even if they are compensatory. If you took deductions on your taxes from your income due to medical bills that were related to the death of your loved one, those amounts may become taxable when you receive the settlement.

Punitive damages are a different story. Punitive damages may be involved in cases where the decedent’s death was the result of deliberate or irresponsible actions. These types of cases usually involve a death that was so extreme that additional actions must be taken against the person or organization at fault. In these cases, punitive damages are meant to serve as a punishment for the guilty party. Also known as “exemplary” damages, these are considered to be gainful and will be subject to income tax.

Hire a Legal Professional

No matter where you reside, hiring an experienced wrongful death attorney can help you navigate the confusing laws surrounding wrongful death. This is a time you should be able to grieve. Legal aid can help take some of the stress and burden off your shoulders so that you can focus on healing your emotional wounds. Wrongful death laws can be complicated and it’s often too overwhelming of an undertaking to go it alone. If your loved one has passed as the result of wrongful death, make sure to contact an experienced Charlottesville, VA wrongful death lawyer to discuss your options.

Thanks to MartinWren, P.C. for their insight into personal injury claims and wrongful death.

Workers’ compensation is a breath of fresh air for someone who is injured on the job; until it’s not. What if your claim gets denied? Are there common reasons denials happen? What should you do about it if you find yourself in that situation? The following breaks it down.

Reasons Claims Are Denied

While there are a dozen reasons a claim could get denied, there are some that are more common than others. These include:

• Filing Too Late – There are deadlines associated with almost every step of receiving workers’ compensation. First, you have to report your injury to your employer almost immediately. Next, you have to file a claim with the state within the statute of limitations. Every state has a different statute, so it’s important you understand yours.
• Leaving Your Job – Whether you were fired, quit or got laid off, leaving your job before filing a workers’ compensation claim could be cause to have it denied. You could have a perfectly good reason for the delay, but that will have to be proven in court.
• Not Meeting Guidelines – In order for you to receive workers’ compensation benefits, your injury or illness has to meet certain guidelines. First, it has to be directly related to your job. Second, your state may have restrictions regarding cumulative trauma or long-term emotional work stress. Finally, your injury must be severe enough to qualify.

What You Can Do

If your claim was denied, all hope is not lost. You may have a perfectly good explanation as to why you filed late, left your job before filing or didn’t meet the guidelines. Read your denial letter closely to fully understand the reasoning behind it. It’s possible there was a clerical or paperwork error that simply needs to be corrected.

If you feel the denial is unjust, contact an attorney to see what you need to do to get an appeal started. You’ll need medical and other evidence to show why the denial was unjust. Your lawyer can help you gather that evidence. Each state has varying levels of the appeals process, and your attorney can help you determine where to turn next.

Contacting Your Lawyer Today

Whether you’ve already decided to appeal a denial or are wondering whether you should, contact a workers’ comp lawyer in Queens, NY for assistance. With the right legal professional by your side, you’ll be better equipped to navigate a world you may not be too familiar with. Call your lawyer today to get started.

Thanks to Polsky, Shouldice & Rosen, P.C. for their insight into workers compensation and denied claims.

When you’re gone, the last thing you want is for your family members to fight over your estate and create additional grief within the family. Unfortunately, it happens more often than you may think. Some family members, for example, might get upset if they’re not getting as much as others and get into disputes. The good news is that you can take steps right now to minimize arguments over your estate.

Select the Right Executor

Minimizing fights over your estate starts with choosing the appropriate executor. The person you select should be trustworthy, responsible, organized, and have good communication skills. He or she should take the job seriously and keep beneficiaries up-to-date with what’s happening with the estate. If your beneficiaries know what’s going on, they will be less likely to get nervous and start arguments.

Make Necessary Changes to Your Estate Plan

It’s important to update your estate plan whenever you have a big life change such as a divorce, marriage, birth of a child, or the death of a beneficiary. If you don’t make the necessary changes, your will might not reflect your current wishes and upset your beneficiaries. For example, if you get divorced, you probably don’t want your ex-spouse inheriting major property. If you don’t make the necessary updates to your will, however, he or she may receive some of your assets.

Explain Your Decisions Beforehand

It’s a good idea to inform your beneficiaries about your wishes while you’re alive. This way, you can avoid surprises and hurt feelings later on. For instance, you may plan on giving your oldest child a smaller inheritance than his or her siblings because he or she is more financially stable. If you explain your decision, you can prevent feeling of suspicion and anger when you’re gone.

Avoid Making Someone a Co-Owner of Your Checking Account

It’s not uncommon for people to add a son or daughter to their checking account when they get older. That way, the son or daughter can easily assist with managing money. However, this can end up backfiring on the owner. If you name someone as co-owner of your checking account, he or she will legally inherit all the money after your death. As you can probably imagine, this will lead to fights among the other children. To avoid these issues, name someone you trust as a power of attorney. This will allow him or her to write checks for you should you become incapacitated. 

If you follow these tips, you can help your family members avoid heated arguments after your passing. If you have additional questions, contact a reputable estate planning lawyer, like an estate planning lawyer from Gilbert, AZ.

Thanks to Citadel Law Firm for their insight into some tips to prevent arguments over your estate. 

Family members of fatal bike crash victims in East Austin, Texas, are still looking for answers, according to KXAN News (https://www.kxan.com/news/local/austin/family-asking-for-answers-a-month-after-east-austin-bike-crash-kills-their-loved-one/).

Just over a month has passed since a crash killed Merry Daye, who was the third victim of a fatal bicycle crash in 2019 on the Cameron-Dessau Road section in the East Austin area.

Recently, advocates of the Bike Austin group took a silent ride in honor of Daye. The family and friends of the 45-year-old woman were in attendance at the event, and they were part of an emotional tribute to the bike accident victim.

Merry Robertson, the victim’s mother, told the crowd that Daye is her child and will always be her child, and she feels her loss every single day and night. During the tribute event, Robertson fought to hold back her tears, and it was clear to all those present that the family was still in deep pain from the loss.

The 45-year-old was riding her bicycle in the designated bike lane at around 2:30 AM in Cameron Road’s 6000 block when, according to police, a silver Dodge Ram truck that was headed south hit her. At the time, she had stopped in the south-bound bike lane to address an issue with her bike.

Daye was transported to a nearby hospital, but was later pronounced dead. While police were able to find the 2014-model truck they are certain was involved, they emptied and processed it for evidence, but still have not identified the driver and are asking the public to come forward with any information they might have.

Ricardo Trevino, an avid cyclist who has been biking in the Austin area for more than three decades, was the organizer of the tribute on Saturday to Daye. It’s a hobby Trevino says he loves, but in the era of people being increasingly distracted behind the wheel, things have changed. He has been to four different silent bike rides for cyclists killed on the roads.

Chris Riley, a former Austin City Council member and the current president of Bike Austin, said that the city’s council has been calling for some protective bike lane measures since 2014. However, none of those measures have been put into place. This includes putting something similar to a fleet post alongside bike lanes.

In 2019 there were three deaths in the same area, including another woman in her 20s who was struck in the same block as Merry Daye. Shortly before Daye’s death, Bike Austin launched a survey asking for public opinion on bike lane safety measure implementation on Dessau and Cameron Roads, and the advocates say the city is going to use the survey results to help make their decision on the matter.

When a car meets a bike, it’s almost always the person on the bike who suffers the most. If you were the victim in an auto-bicycle collision, you have rights and might be entitled to compensation for your losses, suffering, and pain. Contact an experienced motorcycle accident lawyer, like a motorcycle accident lawyer in Denver, CO, about your case.

Thanks to the Law Office of Richard J. Banta, P.C. for their insight into an example of a motorcycle accident that resulted in death.

Part of caring for your family is preparing a comprehensive estate plan. In the event that your death is sudden, having something in place may protect them from lengthy court battles and considerable debt. Regardless of the timing of your death, creating a will that holds up during probate takes considerable planning. There are situations that you can prepare for now to shield your heirs from a possible will contest. Familiarize yourself with the steps you can take to prevent your will from being challenged.

Communicate Changes with Heirs

As you get older, your finances will undoubtedly evolve. Along with your growth will come a change in personal relationships, possibly in ways you cannot comprehend at the moment. You and your spouse could divorce, or you can become estranged from a sibling or child. When there is a change in life — financially or in family dynamics — you should update your will accordingly. Whenever you do this, you should talk to the person responsible for administering your will once you die. Communicating changes to those who may be affected could cause discomfort at first, but it might save your will from facing a challenge in the future.

Ensure the Document Is Executed Properly

It may seem unfathomable that a typographical error or missed step can result in legal action. One way someone can challenge a will is by showing that it was not executed correctly. This may be due to an oversight, such as a missed initial. In other situations, one of the witnesses might not be valid. The requirements for witnessing a will typically bar anyone named in the will from signing it in any capacity. As such, a will challenge may be allowed if an unauthorized person signs it.

Provide Medical Evidence of Competency

Some of the most contentious will challenges occur when the unnamed heirs believe the deceased was not competent to make changes. If you have exhibited signs of mental illness or a progressive disease that affects the brain, like dementia, your will may be thrown out for those reasons. Making changes to a will is your right, and you may do so at any time; however, if you do so after receiving a medical diagnosis, the will may face tougher scrutiny. It is a good idea to have your physician write a letter stating that you had full mental capacity at the time you changed your will. The document is kept with the will in the event of a challenge.

Protecting your wishes after your death may mean taking a few extra steps when creating your estate plan. A living will lawyer, like a living will lawyer in Philadelphia, PA, can provide the guidance you need to ensure those you want to inherit can.

Thanks to Klenk Law for their insight into how to make sure people do not challenge your will.