If you are asking the question, “How is a wrongful death settlement divided in Texas?”, there isn’t a straightforward answer because each case is unique. In the state of Texas, these settlements aren’t split equally. Ultimately, it depends on how many beneficiaries are involved and their relationship/ dependency to the decedent. Beneficiaries may include the surviving spouse, children, or parents.
Hiring an experienced wrongful death attorney is one of the best decisions your family will make when you are facing these difficult circumstances. Our legal team is here to help you navigate the legal process and ensure that your family receives fair compensation for the case.
Who Has the Legal Right to Wrongful Death Compensation
Texas wrongful death settlement distribution is limited to three beneficiary categories:
- Spouse, including common-law marriages.
- Children, including both biological and legally adopted children (adults and minors). Stepchildren are not included unless they are legally adopted.
- Parents, including biological and adoptive parents.
Other relatives are not eligible to receive wrongful death compensation, regardless of how close they were to the person who passed away. For example, siblings, grandparents, grandchildren, fiancés, and in-laws do not qualify.
A few other things worth noting: the eligible beneficiaries must still be alive to receive the settlement. Also, if there are no beneficiaries who file within three months, then the estate representative may file the wrongful death claim.
How Texas Wrongful Death Settlement Distribution Is Calculated
The wrongful death settlement is not equally distributed among the beneficiaries. Instead, the shares are calculated based on how much each person was harmed by the loss of their loved one. There are multiple factors taken into consideration when determining the settlement distribution:
- The level of financial dependency the beneficiary had on the decedent
- How close the relationship was between the beneficiary and the decedent
- Age of each beneficiary
- Documented economic losses as a result of the death
- Mental anguish and loss of companionship
- Loss of future support and household services
It’s typical for minor children to receive larger settlement shares because they would have been dependent on the deceased for a longer period of time, which means that they have a greater future loss.
This process is reviewed by a forensic economist who reviews the financial details, such as tax returns, retirement projections, household services valuations, and other relevant information. Then each beneficiary’s shares are calculated to determine how the settlement will be distributed. If there are disputes about the wrongful death settlement, then negotiations will take place with legal counsel, and a jury verdict can determine the final allocations.
How Damage Categories Are Allocated
Various types of compensation can be included in a wrongful death claim, and these categories are allocated differently:
- Economic Damages: These damages are a bit more straightforward and might include lost earnings, a loss of financial support, funeral expenses, and lost inheritance.
- Non-Economic Damages: Additional compensation might be included for things such as mental anguish and loss of companionship.
- Punitive Damages: Depending on the circumstances of the person’s death, punitive damages might also be awarded. But in the state of Texas, parents are barred from receiving this category of wrongful death compensation.
- Survival Action Damages: This category of damages is passed through the estate and is allocated differently than how wrongful death damages are handled.
Special Rules for Wrongful Death Settlement for Minor Children
When minor children are involved, unique rules apply for the wrongful death claim and settlement. For example, court approval is mandatory if a minor beneficiary will be receiving money (even if all of the adults involved are in agreement). Since court approval is required, it can lengthen the process by a month or two until the case is resolved.
The settlement given to a minor child is managed by a guardian ad litem, who is responsible for protecting the minor’s interests. The settlement money remains in a trust until the child reaches the age of adulthood.
How Allocation Disputes Are Handled Among Family Members
It’s far too common for allocation disputes to occur between family members. Most of the time, these allocation disputes can be resolved through mediation, especially if beneficiaries are in agreement that they want to avoid litigation.
Some of the most common reasons why disputes come up include:
- Estranged spouses
- Blended families
- Adult children competing with stepparents
Things can be even more complicated if families are cross-border and heirs are living in another country.
Regardless of the reason why the disputes are happening, beneficiaries with conflicting interests often require separate legal representation to ensure their lawyer is advocating on their behalf.
Are Wrongful Death Settlements Taxable in Texas?
Taxation laws depend on the type of wrongful death settlement a person is receiving. For example, compensatory damages are usually excluded from federal income tax, but punitive damages are taxable. Additionally, pre-judgment and post-judgment interest are always taxable.
Here in the state of Texas, we have no state income tax. But all of the money from a wrongful death claim that passes through the estate might trigger the need to pay federal estate taxes.
FAQ
Are Texas wrongful death settlements split equally among family members?
No, the shares are not split equally. The distribution calculations are based on the level of financial dependency each beneficiary had on the deceased, as well as their relationship with the person.
Can stepchildren receive a share of a Texas wrongful death settlement?
No, stepchildren are not included in a wrongful death settlement. Stepchildren can only be beneficiaries if they were legally adopted by the deceased.
Are wrongful death settlements taxable in Texas?
As a general rule of thumb, compensatory damages are tax-free, but punitive damages can be taxed under federal law.
Talk to a Brownsville Wrongful Death Lawyer Today
If you are wondering who can file a wrongful death claim in Texas or how to move forward with this process, our skilled legal team is here to assist. Reach out to us at The Green Law Firm to learn more about available services from an experienced law firm. Contact us to schedule your no-obligation consultation, and we’ll help you determine if you have a case worth pursuing: (956) 542-7000.
