Structured Settlements for Airline Disaster Survivors

Structured Settlements for Airline Disaster Survivors

July 9, 2013 – The first fatal airline crash in the United States in nearly four years naturally stirs interest and speculation.

What happened and why?

What happens to the families of those killed?

What happens to those on board who lived?

And as with any accident, the conversation always turns to who’s at fault and how those impacted will be compensated assuming claims arise from the incident.

Yesterday’s CNNMoney article “Asiana passengers likely to get millions” focuses on the potential financial outcome of the claims process for the victims.

The article quotes noted aviation personal  injury lawyer Arthur Wolk who specializes in air crashes. Wolk points out something often overlooked by a public that focuses exclusively on those who have died:

PTSD

Not all injuries are readily observable!

One particular paragraph in the article caught our eye:

Wolk said even the 123 passengers on the plane who escaped without any physical injuries are likely to see seven-figure settlements from the airline and its insurance carriers due to Post Traumatic Stress Disorder (PTSD).

An Important Distinction

One issue not raised by the article is the important difference between personal physical injury and personal non-physical injury as it pertains to claim settlements. To wit:

Damages paid on account of personal physical injury (excluding punitive damages) are exempt from income tax per IRC Section 104(a)(2).

Damages paid on account of personal non-physical injury are NOT exempt from income tax.

Understanding this distinction is crucial for anyone entering into settlement discussions such as those likely to stem from the Asiana Airline 214 crash.

And depending on each individual situation, it’s entirely conceivable that a plaintiff in one part of the plane will have sustained physical injuries while fellow passengers in another part will “only” have sustained non-physical injuries.

We are NOT downplaying the seriousness of PTSD. Far from it.

But the tax code is clear:  Under current law, emotional distress on its own is insufficient to constitute physical injury.

Structured settlements available for both

Fortunately, whichever category each plaintiff falls into, a structured settlement will likely be a part of the solution.

And of this we are 100% certain:

If these settlement figures come anywhere near the dollars Mr. Wolk suggests, those with non-physical injuries will likely be able to mitigate their tax burden by choosing to settle their claim using a . . .

Taxable Damage Structured Settlement

While it’s too early to know with any degree of certainty how any settlement discussions will unfold, we urge anyone considering ANY settlement offer to fully evaluate the impact of taxes on their settlement before agreeing to anything.

We stand ready to assist anyone requiring assistance.

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