Present Value Calculation for Death Compensation

One of the most confusing things about wrongful death compensation is how it is calculated.

It’s hard enough to handle the fact that you suddenly lost a loved one due to the negligence of another, let alone understand how to calculate wrongful death compensation. These cases definitely need the skill of an experienced Austin personal injury lawyer to navigate the choppy waters surrounding death calculations and how an award is translated to present day dollars.

Texas wrongful death claims are unusual. When a person is wrongfully killed, the claims are governed by the Texas Wrongful Death and Survival statute. This statute describes who can sue in a death claim and what damages they may recover.

When a person is wrongfully killed, the person’s estate has a “survival claim.” The estate has the right to seek damages for any medical or funeral expenses that the person incurred as a result of the incident, plus claims for any pain and mental anguish the deceased might have experienced before his or her death.

The statute also allows some family members to make a “wrongful death” claim. In Texas, the only people that can make a wrongful death claim are the deceased’s spouse, children and parents. The spouse and children get to ask for damages of pecuniary loss (loss of care, maintenance, support, services and advice that the person would have provided), loss of companionship, mental anguish, and loss of inheritance. Surviving parents may also seek these damages, except the loss of inheritance damages.

Needless to say, it can be extremely confusing and complicated.

Loss of inheritance is based on the lost income of the person killed. Future lost income is usually figured out based on the amount of income a victim would have earned had they not been killed. This may be calculated by taking the deceased’s income when they died and then multiplying it by the years left until retirement (and finding a formula to compensate for increases in income the person would have received) or until their expected death. As you may have already guessed, retirement ages differ from one person to the next and when a person dies is based on complicated actuarial tables.

An example of how this would work would be a 50-year-old man making $40,000 a year when he was killed and was not banking on retiring for another 15 years. That individual’s income, when he was killed, would be multiplied by the number of years he had left to work. That would be $40,000 x 15 years which would make his future losses of $600,000 (give or take).

The fly in the ointment is accounting for raises the person would have received and reducing the overall value to present day dollars because Texas law requires awards of future income to be “discounted” to present value. In many cases, one of the biggest fights is the fight among each side’s economists arguing about the way these two calculations should be done.

Something to remember is that wrongful death compensation figures are not always calculated the same way simply because of the presence or absence of various factors may be different in each case. The only way to get a good idea of what compensation may be in a wrongful death case is to discuss the matter with an Austin personal injury lawyer. They would be able to outline how the process works and what you could expect to see during the course of the trial.

Brooks Schuelke is an Austin personal injury attorney with Perlmutter & Schuelke PLLC. Contact an Austin injury lawyer at Civtrial.com or (512) 476-4944.

Perlmutter & Schuelke, PLLC maintains offices in Austin, Texas. However, our attorneys and lawyers represent clients throughout the state of Texas, including Dallas, Houston, San Antonio, Forth Worth, El Paso, New Braunfels, San Marcos, Kyle, Buda, Round Rock, Georgetown, Lockhart, Bastrop, Elgin, Manor, Brenham, Cedar Park, Burnet, Marble Falls, Temple and Killeen. By Brooks Schuelke


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