Who Gets the Money in a Wrongful Death Settlement in Alabama?

Any money recovered through a wrongful death claim in Alabama goes to the deceased’s heirs, according to the state’s succession laws. Surviving spouses, children, parents, or other family members may receive compensation.

This answer only scratches the surface of this complicated issue, though. There are also rules about how much each survivor gets under different scenarios, such as when the deceased was married with children or had children outside the marriage.

How Is the Money Distributed in an Alabama Wrongful Death Claim?

You might expect that someone’s will would dictate who gets the money from a wrongful death lawsuit and how much each eligible heir receives. However, that’s not the case in Alabama. Regardless of whether someone has a valid will or not, any money from a wrongful death claim is distributed according to strict formulas found in Alabama’s intestate succession laws. Here’s a breakdown of how the money is awarded in a wrongful death lawsuit:

If the deceased:

• Was married but had no living children or parents, the spouse gets all the money.
• Had children but was not married, the children get everything.
• Was married with children from that marriage, the spouse gets the first $50,000 and half of the rest, and the children get the remainder.
• Was married with children from another relationship, the spouse gets half, and the surviving children get the rest.
• Was married with no children but had surviving parents, the spouse gets the first $100,000 and half of the rest, while the parents get the remainder.
• Was not married and had no children, the parents get all the money.
• Did not have parents, a spouse, or children, then any surviving siblings get the money.
• Did not have any surviving spouse, children, parents, or siblings, the next closest family member gets the money.

How Does the Wrongful Death Settlement Process Work?

Wrongful death claims in Alabama involve many steps, and any missteps along the way could jeopardize the outcome of the case. Here’s a breakdown of the settlement process:

• Filing a Claim. Under Alabama law, only the personal representative of the deceased’s estate (sometimes called an “executor”) can file a wrongful death claim. If the deceased does not have a will designating a personal representative, the courts can appoint someone to handle their estate.
• Investigating the Case. The representative, usually with a lawyer’s help, investigates the circumstances of the deceased’s death. They gather evidence like medical records, police reports, and witness statements to build a compelling case showing that someone else was to blame for the death.
• Negotiating a Settlement. The parties may try to settle the case out of court. The personal representative accepts a sum of money in exchange for permanently dropping their suit.
• Going Through Discovery. If a settlement cannot be reached, the case will go to trial, beginning with discovery. Both sides exchange information and evidence. This process may involve depositions, interrogatories, and document requests.
• Litigating at Trial. Both sides present their evidence and arguments to a judge or jury.
• Receiving a Verdict. The court reaches a decision, and the judge or jury may award compensation to the deceased’s personal representative. The representative then ensures this money is distributed according to Alabama law.

How Are Wrongful Death Settlements Paid?

According to the state’s succession laws, any money from an Alabama wrongful death settlement goes directly to the deceased’s heirs. This compensation does not go through the usual probate process. The deceased’s personal representative usually oversees this process with help from their legal team.

Can the Deceased’s Creditors Claim Money from the Settlement to Pay Debts?

Creditors cannot claim any compensation from a wrongful death settlement to pay the deceased’s outstanding debts. The only compensation available in a wrongful death claim is punitive damages, which aim to penalize the liable party for their wrongful acts that caused the deceased’s fatal injuries or illness. It would not be fair or just to allow creditors to claim this compensation, particularly when the deceased’s family is grieving and likely needs the money for funeral bills and other expenses.

Are Wrongful Death Settlements Taxable?

Wrongful death settlements are not taxable in Alabama. In general, IRS guidelines say the money from a personal injury settlement (including wrongful death settlements) is not taxable income. That’s because most of the money from a personal injury settlement is usually considered compensatory damages meant to make the victim whole after an injury. So, this money is not “income” in the traditional sense.

However, Alabama does not allow compensatory damages in wrongful death cases. Instead, it only allows punitive damages – which the IRS usually considers taxable income. Fortunately, the IRS recognizes the unique nature of Alabama law and typically does not tax the money from a wrongful death lawsuit. If you have questions about the potential tax implications of a wrongful death settlement, consult an Alabama wrongful death attorney.

Contact an Alabama Wrongful Death Lawyer

Have you recently lost a loved one in Alabama? Was someone else to blame? If so, contact Gartlan Injury Law for help pursuing a wrongful death claim against the at-fault parties. We understand your desire for justice and want to use all our knowledge and skills to enforce your rights. While you focus on your grief, we can:

• Investigate the incident to determine all parties who may be to blame for your loved one’s passing
• Prepare and file demand letters with at-fault parties and their insurers
• Send complaints through the courts to initiate your case
• Negotiate aggressively for a fair settlement on your behalf
• Take your case to trial if it becomes the best way to assert your rights

We’re prepared to do this without any upfront cost to you. Instead, we’ll only charge you a fee if we win your case. Call us today or complete our contact form to get started with a free consultation.

Visit Our Alabama Wrongful Death Law Offices