Wrongful death settlements provide financial compensation to family members who have lost a loved one. Generally, Ohio allows wrongful death settlements to be paid out in one of two ways: lump sum or structured settlement. At Groth & Associates, we work closely with our clients to determine the best way of receiving compensation.
This is pretty much what it sounds like. If the settlement is for $600,000, then the defendant (or his insurer, more likely) pays that amount to the lawyers, who deduct their percentage according to the contingency fee.
The lump-sum is then distributed according to family members based on ORC 2125.03. This law states that the judge will determine each family member’s share based on various factors, such as their relationship to the deceased and their age and physical/mental health. However, if the only beneficiaries are all children of the deceased, for example, they can choose how to divide it themselves.
Once the defendant pays the lump sum, they don’t play anymore. And family members will not be receiving anything beyond the lump sum payment.
There are advantages to receiving a wrongful death settlement in a lump sum. For one thing, it gives family members immediate access to a large sum of money which they can use however they want. Some clients want to make an immediate purchase, such as a new house. Others want to invest it all, which will generate greater returns (usually) since the amount invested is larger.
There are some negatives to a lump sum payment, however. Taxes are a big one. Because the settlement is so large, you might owe more on your tax bill than if you received smaller payments regularly.
With this type of payout, our client receives a smaller amount periodically, often once every month or once a year. So if they were set to receive $300,000, they don’t get it all at once. Instead, they might receive $30,000 every year for 10 years.
Sometimes, a defendant requests a structured settlement, especially if he or she does not have insurance. These defendants usually can’t pay a huge amount in one fell swoop, so they request breaking up the settlement into smaller payments until the full amount is paid.
Structured settlements come in different sizes. There is some flexibility as to how you structure the payments. Each payment does not have to be an equal amount. Instead, you might request a larger sum at the beginning of the end.
There are advantages to a structured settlement. One, you won’t spend all the money at once. This is a concern if you are tempted to blow it all on frivolous things. Two, there may be tax advantages to receiving a smaller amount every year.
We Can Help You Choose How to Structure a Settlement
How you receive a settlement is something each side agrees to as part of a settlement. At Groth Law, we will work closely with you to understand your concerns and help you choose the best option.