Alabama, unlike most other states, only allows recovery for punitive damages in
wrongful death cases. Other states may allow damages relating to the loss of the deceased
person's life and other related damages. However, in our state, the
purpose of a wrongful death lawsuit is only to punish the defendant and
to deter similar negligent acts by other individuals. The punitive damages
are paid directly to the heirs of the deceased person, not to the estate.
Alabama's Wrongful Death Damages Are Different
In Alabama, you may not recover compensatory damages in a wrongful death
case. For instance, if a person runs a red light and kills a 38-year-old
father of two, who makes $80,000 a year, his family cannot ask the jury
to award damages for his future lost wages or for his mental anguish before death.
While that argument can be made in all other states, in Alabama you may
only ask the jury to punish the person who ran the red light. This can
be a more difficult burden on victims' families because juries may
be less likely to punish someone for making a mistake that anyone could
make. Running a red light could happen to anyone.
The Good News Is, Punitive Damages Are Not Taxable
As a general rule, the proceeds received from most personal injury claims
are not taxable under either federal or state law. However, the same is
not true for punitive damages, which are taxable by the IRS in most situations.
In Alabama, though, punitive damages in wrongful death claims are not
taxed. In fact, there is a specific exemption in the Internal Revenue
Code which applies only to Alabama.
If someone you love passed away due to the negligence of another, contact
our firm today. Our compassionate wrongful death attorneys are dedicated
to fighting on behalf of you and your family. We are here to answer any
questions regarding your case.
If you have questions regarding a wrongful death matter,
contact us online or by calling the Law Office of Cody R. Wix, LLC at (205) 381-4787.