1. Gather Documents
Make sure you gather all the necessary paperwork in order to determine the formal compensation value. To define what an individual could have earned, had he or she not die, the beginning point would be historical pay stubs and benefits statements. Wages are described in W-2s, 1099s, pay stubs and tax returns. The more years of earnings you are able to observe the subject has, the better idea you have of the applicant’s earnings profile. It would have been preferable of course to have at least three to five years of documents prior to the event through to the present. Combined with this information, descriptions of their earnings should provide a clear picture of the earnings such as salary, bonuses, commissions and so on. You also should make sure that you obtain all accessible documents from the client; therefore, look through our list of earnings types. Regarding: employer-provided benefits, examine the employee handbooks, offer letters and all written descriptions of the benefits where the employer has made his contribution. Some of these may be in form of health insurance, 401k and pension among others, Social Security, Medicare among others. Sometimes pay statements and W-2s specify the contributions of the individual and the employer towards health insurance, 401k and other welfare benefits.
2. Estimate The Income and Earnings They Would Have Received If They Were Alive
The non-incident earnings and benefits are what the individual would be able nonetheless to earn if he or she did not die. More often than not, one can only forecast their wages from previous earnings especially if this income is consistent for the remaining part of their career. Depending on the historical earnings patterns, they may employ their earnings capacity as either an inflation adjusted average, average of any previous earning or at last any previous year’s earnings before arrest. The historical earnings may, in some cases, not reflect the earnings ability of the individual concerned. For instance, if the decedent is a minor child, below the bar passing age, or had not completed their education or had newly entered the workforce their low or nonexistent earnings in the last years of their life does not extricate to what they could have earned in the course of their lifetime. When it comes to such examples, it becomes possible to make use of average income of people, which can be by profession, industry or education level.
3. The Length of The Damages
In wrongful death, damages are recovered to the point of time when the plaintiff – in most cases the spouse and/or children of the deceased – is expected not to incur any loss anymore because of the death. For earnings and benefits damages, such period is usually to the decedent’s work life expectancy or assumed age of retirement. Employment expectations are the number of years that an individual is expected to be in the workforce all through his or her lifetime. In some other cases, the period of damage may be less, for example where the spouse is older than the decedent and her probable life expectancy may be less than the work life expectancy. The other factor is to identify the past and future losses Economic damages may be relevant for two time periods: from the date of the incident up to the present time and from the present time going forward. These are categorized as past losses and future losses.
4. Discount Future Losses to Today’s Cash Equivalent
Majority of the settlements and awards are usually paid in one bulk amount. However, compensation may be sought for the actual losses that are any earnings and other benefits that the dependents would have received throughout the affected person’s working life. Future damages should be brought down to present value, otherwise the defendants are likely to be over-compensated. The present valuation of future damages accounts for the time-value of money. In short, money received today is more valuable than money received in the future, as money received today may be invested and earn interest over time.
To convert the future damages to present day value, a discount rate is applied. The discount rate accounts for the interest the individual could expect to receive from investing their lump sum in a risk-free investment. The use of a risk-free investment is necessary as it is assumed the investment will be secure and ensuring the annual funds needed to cover the projected future economic losses in each year they are expected to occur.
Sum up!
For the more accurate analysis you need to consult with the professional because only the lawyer can calculate the results according to your specific case. An expert personal injury lawyer in Middle Tennessee is here to assist you thoroughly because he/she knows the exact points to file a claim against how to calculate the economic damages.
As you know there are different situations, & the compensation varies accordingly! A lay man could not have an idea about how to get the exact amount with the right statement or the correct procedure so make a contact with a professional to get the desired results!
