Legal Question in Tax Law in California

Re: Wrongful Death Settlement - Taxable

The portion of the award, if any, that is attributable to injuries suffered during the decedent's lifetime, what attorneys refer to as a survival cause of action, is usually not taxable, or at worst it is part of the estate and subject to estate tax if the decedent had sufficient assets to owe estate tax.

Unfortunately, "pure" wrongful death money, in other words based on emotional damage to the heirs, their loss of the decedent's comfort and society, etc. usually is taxable.

Wise plaintiff attorneys therefore try to get appropriate language incorporated in the settlement documents in an attempt to escape or minimize taxation. If it is not too late, ask your lawyer to consult a tax expert and have the settlement documents worded appropriately.