The unexpected death of a loved one is never an easy thing to go through. The situation can be even more difficult to deal with if your loved one lost their life as a result of another’s wrongdoing.
If you depended on your loved one to provide for you, you might ask yourself the following questions after their death:
- How will I pay for their funeral?
- How will I pay for their medical expenses before they died?
- How will I maintain my lifestyle now that they’re gone?
You’re likely asking yourself those questions while you’re grieving the loss of your family member. While you may be just going through the motions to keep yourself moving, you may be able to find the answers to the questions above by filing a wrongful death suit.
Once you’ve agreed upon a settlement amount, it will need to be dispursed to the proper parties. Here’s how that process works:
One way the settlement can be paid out is through the use of a structured settlement. This type of settlement is paid out as an annuity instead of a lump sum. Essentially, this means that you’ll receive payments over a period of time of your choice.
You may be able to take advantage of certain tax benefits for receiving structured settlement payments. Typically, structured settlement payments are tax-free, which is a major benefit of receiving your settlement in this manner.
If you prefer to receive the entire settlement at once, you’ll want to consider a lump-sum payment. A lump-sum payment may be more beneficial if you don’t think you’ll live long enough to receive the entire settlement in an annuity.
However, it’s important to keep in mind that there are serious tax implications if you decide to receive the payment as a lump-sum. With a lump-sum payment, you’ll be required to pay income tax on the settlement amount. The tax rate you pay will depend on the amount of your settlement, but you’ll likely be in the highest tax bracket, which means you’ll pay the most money.