Are Wrongful Death Settlements Taxable In Washington?

A wrongful death claim is a type of personal injury claim. In Washington, close family members may recover financial compensation for the loss of a loved one if their death directly resulted from someone else’s careless, reckless, or intentionally wrongful actions.

If the circumstances of the death are such that the decedent could have filed a personal injury claim for damages had they survived their injuries, then the decedent’s personal representative—either the named executor of their estate or a family member selected by the court—may file a claim to recover compensation for close surviving family members.

For families in Renton, working with a Renton wrongful death lawyer can provide invaluable support during this challenging time. An experienced Renton wrongful death attorney can guide grieving families through the legal process, ensuring their rights are protected and helping them pursue the financial compensation they deserve for medical expenses, funeral costs, lost income, and emotional suffering.

Common Causes of Wrongful Death Claims In Washington

Close family members may seek compensation for a loved one’s death if it was a preventable fatality caused by negligence or wrongdoing. Common causes of Washington wrongful death claims include the following:

• Car accidents
• Commercial truck accidents
• Pedestrian/bicycle accidents
• Motorcycle accidents
• Workplace fatalities
• Medical malpractice
• Defective products
• Premises injuries
• Acts of violence

When family members lose a loved one in a preventable accident or due to someone else’s wrongdoing, they have a right to recover compensation and a sense of financial accountability and justice. The IRS does not tax compensatory damages.

Is a Washington Wrongful Death Settlement Taxable?

The Internal Revenue Service (IRS) does not require taxes from personal injury settlements, including wrongful death settlements. Because wrongful death settlements provide compensation for losses such as:

• Medical expenses accrued before the death
• Funeral expenses
• Burial costs
• Lost income for the number of earning years the decedent would have had remaining
• Loss of household services
• Grief and anguish
• Loss of consortium and companionship
• Loss of parental support and guidance

All of the above damages are compensatory, therefore they are not taxable by the IRS.

Are There Exceptions to the No-Tax Rule for Wrongful Death Settlements?

If the decedent’s death was caused by another party’s particularly egregious actions, the claim could include punitive damages. Although punitive damages in wrongful death claims are paid out to the closest surviving family member—typically a spouse, adult child, or parent—they do not serve as compensation for losses but as a punishment and a deterrent to prevent a repeat of the wrongdoing. If a portion of the wrongful death settlement is for punitive damages, this amount is taxable.

If a wrongful death settlement amount accrues interest before it’s paid out to the beneficiaries the amount of the interest earned on the amount is taxable.

How Can a Wrongful Death Attorney In Renton Help?

The success of a wrongful death claim can be crucial to surviving family members who’ve suffered financial losses as well as the grief and sorrow of a sudden shocking death. When a claim is critical to prevent financial hardship and also to give family members a sense of justice, it shouldn’t be left up to the insurance companies to decide. Insurance companies may protect their profits at your family’s expense.

Contact the experienced Renton wrongful death lawyer at Caffee Accident & Injury Lawyers for legal representation throughout the claim process, including navigating tax questions in your case.