The J. Murphy Firm are personal injury and auto accident lawyers in Pittsburgh. But, when a victim has been killed, we represent the victim’s survivors as wrongful death lawyers.
What is Wrongful Death?
People die every day, usually because of natural causes. When someone’s life is cut short due to the negligence of someone else, that is called a wrongful death action. We handle wrongful death actions in Pittsburgh and all over Pennsylvania.
When we put on a wrongful death action, it involves two separate types of claims on behalf of the survivors of the person who was killed. One type of claim is called a Death Action, and the other type of claim is called a Survival Action.
What is the difference between a Death Action and a Survival Action?
There are important differences between a death action and a survival action. Those differences have drastic effects on who can bring the case or share in the proceeds of the case. Additionally, how the proceeds of the case can be divided and minimizing the tax liability of those sharing in the proceeds.
Death Actions in Pennsylvania
As noted above, a wrongful death action involves a death action and a survival action. The death action in wrongful death case involves the survivors of the deceased making a claim for the loss of their loved one. People have a right to the love, support, companionship, guidance, and advice of their loved ones. When that loved one is killed by negligence or wrongful conduct, the survivors have a right to sue for what they have lost.
Because it represents the survivors suing for their own loss, the wrongful death claim is owned by the survivors. The basis of the wrongful death action is that the survivors are recovering for a loss. Meaning, payment of a wrongful death settlement or verdict to the survivors of the decedent is generally tax-free.
Survival Actions in Pennsylvania
The survival action in a wrongful death action involves claims for pain and suffering that the deceased went through before they died. If the deceased had lived, they would have been able to sue on their own for these damages. That right to sue for these damages survive the death of the deceased. That is why this action is called a survival action, it is the survival of claims the deceased had at their death.
The survival action is a claim for losses suffered by the deceased themselves. Because of this, the survival claim is the property of the estate of the deceased. Therefore it is subject to estate tax, if large enough.
A lost wages claim is a claim for wages the deceased would have earned, had they survived. Such a claim for lost wages is normally a part of a survival action. If the deceased had actually earned the money being recovered in the lost wages claim, they would have had to pay income tax on those earnings. As a result, any part of the case that is a lost wage claim is subject to federal income taxes on wages.
Follow us on Facebook or jmurphyfirm.com for Part 2 of this blog. In the second part, I will discuss how we protect our clients from paying more than their fair share of taxes due on a wrongful death settlement.