Wrongful Death Settlements: Who Gets the Money and How Payouts Work

November 7, 2020
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While a wrongful death lawsuit cannot undo the loss your family has suffered, it can ease the financial burden that’s been left behind. 

If you are considering a wrongful death claim, you may be asking questions like:

  • What is the average wrongful death settlement?
  • Who gets the money in a wrongful death lawsuit?
  • How are wrongful death settlements paid out?

The answers depend on several factors, including the circumstances of the death, the financial impact on surviving family members, and whether the claim is brought by the estate or directly by beneficiaries.

At Skousen Gulbrandsen & Patience PLC, we can break down how wrongful death settlements work, including average payout ranges, how compensation is calculated, how funds are distributed, and what factors can increase or decrease the value of a claim. 

What Qualifies as Wrongful Death?

Arizona Revised Statutes Section 12-611 defines wrongful death as a situation where, if the injured party had not died, there would be enough evidence to file a personal injury case. In other words, if the victim could have filed a personal injury case but died as a result of their injuries, the family or estate of the victim can file a wrongful death lawsuit on their behalf.

Essentially, wrongful death is a civil claim that allows surviving family members to seek wrongful death compensation when their loved one’s death was caused by:

These cases fall under personal injury law, meaning the individual or entity liable for the death can also be held financially responsible for compensating the deceased’s family .

Who Can Sue in a Wrongful Death Lawsuit?

In the state of Arizona, there is a limit on who can file a wrongful death claim. Generally speaking, this provision only allows the surviving family members of the deceased person or the deceased person’s estate to file a wrongful death lawsuit.

The parties that can file a wrongful death claim are limited to:

  • The surviving spouse of the deceased
  • Any surviving child of the deceased, including adult children
  • Any surviving parent or guardian of the deceased, regardless of the age of the deceased
  • A personal representative of the deceased’s spouse, child, parent, or guardian
  • A personal representative of the deceased’s estate

Unlike some states, Arizona does not automatically allow siblings, grandparents, aunts, uncles, or cousins to file wrongful death claims unless they are the legal personal representative of the estate and no closer relatives exist.

Is There a Time Limit on a Wrongful Death Lawsuit?

Yes. In Arizona, there is a strict deadline for filing a wrongful death claim called the statute of limitations. This is a court-enforced time limit that determines how long surviving family members have to file a civil claim after a loved one’s death.

Under Arizona Revised Statutes § 12-542, the statute of limitations for wrongful death cases is two years from the date of death. This applies whether the death resulted from a car accident, medical malpractice, workplace incident, or another negligent act.

If you miss this deadline, the court will likely dismiss your case, and you will lose your right to pursue compensation, regardless of how strong your case might be.

Wrongful Death Claims vs. Survival Actions: Who Gets the Money?

The answer depends on who filed the claim and state law. In Arizona, wrongful death compensation is distributed to eligible family members in proportion to the damages they suffered from the loss.

Wrongful Death Claims

When family members file a wrongful death claim, the compensation is paid directly to statutory beneficiaries defined by Arizona law. These are people who suffered financial or emotional losses from the death:

  • Surviving spouse: Entitled to compensation for loss of income, companionship, and support.
  • Surviving children (including adult children and adopted children): Entitled to compensation for loss of financial support, guidance, and companionship.
  • Surviving parents: Entitled to compensation if they were financially dependent on the deceased or suffered emotional damages.
  • Other dependents: In some cases, financially dependent relatives may receive compensation.

Arizona law states that each eligible family member receives a share proportional to their damages. For example, dependent children who relied on the deceased’s income may receive a larger percentage than a financially independent sibling.

The person who files the lawsuit may become the trustee of the settlement funds and is responsible for distributing the money to all statutory beneficiaries.

Survival Action Claims

A survival action claim is filed by the estate of the deceased to recover damages the deceased would have recovered if they had not died, such as medical bills, lost wages from the time of injury until death, and pain and suffering endured before death 

What Happens if There’s No Will in a Wrongful Death Case?

It’s fairly common for there to be no will in a wrongful death case, particularly if the victim was young. If your loved one did not have a will, the surviving family members must select a personal representative to speak for the estate.

If the surviving family members cannot come to a consensus on who will be the personal representative, a court will intervene to resolve the dispute and disperse the settlement under the intestate succession laws.

Are Wrongful Death Settlements Taxable?

Generally, no. At the federal level and typically in Arizona, wrongful death lawsuit awards and settlements are non-taxable because the money is considered compensation for personal injury or wrongful death, not income. 

However, tax laws can vary, and certain portions (like punitive damages) may be taxable. Always consult a tax professional and an attorney for your specific situation. 

What Are Examples of Wrongful Death Damages?

One of the most difficult aspects of a wrongful death claim is understanding what damages you can recover and how much a wrongful death settlement is worth. In personal injury law, damages are divided into two main categories:

  1. Economic damages for measurable financial losses
  2. Non-economic damages for intangible losses like pain and suffering

In Arizona, you may also be able to recover punitive damages in cases involving extreme recklessness or intentional misconduct.

Economic Damages

Economic damages are the tangible, calculable financial losses inflicted on the estate and family because of the victim’s death. These damages typically include:

  • Funeral and burial expenses to cover the funeral service, burial or cremation, casket, headstone, and memorial.
  • Medical expenses such as emergency care related to the deceased’s final treatment.
  • The value of lost wages and future earnings the deceased would have earned if they had lived.
  • Loss of benefits including retirement contributions, health insurance, stock options, and pensions.
  • Property damages due to the event that led to the deceased’s death.

Aside from economic losses, damages inflicted by the person’s death also include pain and suffering endured by the deceased before their death. These losses are typically paid to the estate and then distributed among surviving family members according to the will or intestacy laws.

Non-Economic Damages

Non-economic damages compensate for emotional and psychological losses that are harder to quantify. These damages are typically paid directly to the deceased’s surviving family members:

  • Lost value of household services the deceased performed, such as lost wages the deceased would have earned if they had lived.
  • Loss of care, companionship, and guidance, especially in the case of a child losing a parent.
  • Pain and suffering due to the untimely death of a loved one.

In Arizona, non-economic damages can range widely depending on the relationship to the deceased and the circumstances of the death.

Punitive Damages

In severe cases, such as medical malpractice or drunk driving, the court may award the victim’s family punitive damages. Punitive damages are not available in every case and typically require proof that the defendant was particularly reckless or egregious.

For instance, a doctor who performs surgery intoxicated and ultimately kills their patient could be charged with punitive damages. The goal of these damages is to punish the at-fault party and to prevent similar behavior in the future.

How to Calculate a Wrongful Death Settlement

Wrongful death settlements are calculated using several factors. There is no simple formula, but Arizona courts and attorneys typically consider these key factors during the evaluation: 

  • Financial dependency: Survivors who were more dependent on the deceased receive higher compensation.
  • Age of the deceased: Younger victims with more earning potential may receive a higher payout as compared to a retiree.
  • Income level: Higher earners may receive a higher payout based on salary.
  • Number of survivors: More dependents (spouse + children) may result in a higher payout.
  • Circumstances of death: If the death was caused from an egregious fault, the settlement may be higher.
  • Pain & suffering: If your loved one suffered before ultimately passing away, there may be a higher settlement payout for non-economic damages.
  • Liability strength: Clear fault typically results in more compensation than lawsuits with disputed fault.

Average Wrongful Death Settlement Amounts

It’s difficult to estimate the average wrongful death settlement because every case varies dramatically. These numbers are rough estimates based on national averages and settled cases. Every case is unique, and actual settlements vary dramatically based on the circumstances, insurance limits, and evidence strength. These ranges should not be taken as a guarantee of what your case will be worth. Arizona cases may differ from national averages due to state-specific laws and local jury verdicts. Average settlements may include:

  • Car accidents: $500,000 - $1.5 million
  • Medical malpractice: $750,000 - $3 million or more
  • Workplace accidents: $400,000 - $1.2 million
  • Product liability: $500,000 - $2 million
  • Truck accidents: $1 million - $5 million or more
  • Pedestrian/bicycle accidents: $300,000 - $1.5 million

Again, these are average ranges based on settled cases. Some cases settle for less, while others (especially those involving high-income earners or multiple dependents) can exceed $5 million.

How are Wrongful Death Settlements Paid Out?

After winning a wrongful death lawsuit or reaching a settlement, the next question is: “How and when will our family receive the money?”

Wrongful death settlements are typically paid out by the at-fault party’s insurance company, but the process involves several steps before beneficiaries receive their share.

Who Pays for a Wrongful Death Lawsuit?

Wrongful death settlements are usually paid by one of the following:

  • Insurance company: This typically applies for cases involving car accidents or medical malpractice.
  • Individual or business: If the settlement exceeds policy limits or there’s no insurance, the at-fault party may be required to pay out of pocket.
  • Government entity: If a government agency or employee caused your loved one’s death.

Most insurance policies have a policy limit (maximum payout). If the settlement exceeds this limit, the at-fault party is ideally personally responsible for the remaining amount. However, in many cases, defendants may not have sufficient assets to pay the excess, which is why recovery often depends on insurance coverage. 

Payout Methods: How You Receive the Money

Wrongful death settlements can be paid out in several ways, depending on the family’s needs and the terms of the agreement:

  1. Lump-Sum Payment (Most Common): The full settlement amount is paid all at once. Beneficiaries receive a single check for the entire amount. Most families prefer this option because it allows them to address immediate financial needs (funeral expenses, medical bills, debts, daily living costs).
  2. Structured Settlement (Installment Payments): The settlement is paid in regular installments over time (monthly, quarterly, or annually). Payments can last for years or even decades. Provides steady income, prevents overspending, and payments are typically tax-free. Often used when:
    1. Minors are beneficiaries
    2. The payout is substantial ($500,000+)
    3. The family wants long-term financial security
  3. Trust Fund: Settlement funds are placed in a trust managed by a trustee. Common when beneficiaries are minors or need long-term care. The trustee distributes funds according to the trust terms (e.g., for education, medical care, living expenses).
  4. Combination Approach: Split the settlement into lump-sum + structured payments. Provides immediate funds for pressing needs while ensuring long-term stability.

How Long Does it Take to Receive a Wrongful Death Settlement Check?

While some wrongful death lawsuits may settle within one to three months, other claims can take an average of one to four years. How long the claims process takes depends on whether the case goes to trial, if the estate has existing debts, and if the surviving family members can come to an agreement regarding a personal representative.

If all family members agree immediately, and the claim is quickly approved by the insurance company, the settlement can be paid much faster. The average amount of time it takes to receive a wrongful death settlement check is approximately 30 to 60 days after the settlement is reached, though this can vary depending on the complexity of the case.

If the family utilizes a wrongful death attorney, the attorney will process the check first. After removing the applicable attorney fees and paying any existing medical liens from the deceased’s final medical treatment, the settlement is paid to the surviving family.

Seek an Experienced Wrongful Death Attorney to Learn More

A wrongful death settlement cannot reverse what’s happened to your loved one, but it can provide you and your family with much-needed financial assistance. Contact Skousen Gulbrandsen & Patience, PLC for a free consultation with a compassionate wrongful death attorney.attorney can fight for the compensation you and your family are owed.

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