Is My Settlement Taxable?

Is my settlement taxable? One of our viewers writes in and asks Attorney Ben Schwartz about tax liabilities on personal injury settlements. 

TRANSCRIPT:

Hi, I’m Attorney Ben Schwartz.

Today, we are going to answer a viewer question. Bob, from Wilmington, Delaware says, “I was in a car accident. I got a settlement, and my attorney didn’t tell me if I need to pay taxes on it. Now, I find out he has been disbarred. Can you tell me if I need to pay taxes on the proceeds from my settlement? Is my settlement taxable?

Bob, this is not legal advice. I would be happy to review your settlement documents with a free consultation and how your lawsuit was filed. I’ll be happy to look at your complaint and whatever documents you have to try and answer your question correctly.

Generally speaking, personal injury settlement proceeds are not taxable if it is compensation for bodily injury claims for your pain and suffering due to sustained physical injuries as a result of a car accident or a slip-and-fall accident. The IRS even has a publication entitled Settlements – Taxability. (Click on link for IRS Document 4345.)

However, there are several exceptions to that rule. If you file a lawsuit, and you claim that the at-fault driver was acting so terribly that you should be awarded punitive damages (meaning, you will also receive compensation because the at-fault person acted with such negligence you are entitled to additional compensation in order to punish the wrongdoer). In this case, the punitive damages are probably taxable.

If you have questions about the law and how it relates to personal injuries, auto accidents, slip-and-falls, dog bites, medical malpractice cases, I am an attorney in Delaware and Maryland. I would love to hear from you! You can email me below.

Thanks for watching!

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Dover, DelawareWilmington, DelawareHavertown, PennsylvaniaSalisbury, Maryland
Dover, Delaware
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1140 & 1126 South State Street
Dover, Delaware 19901
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Wilmington, Delaware
(302) 654-4930
1525 Delaware Ave.
Wilmington, Delaware 19806
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Philadelphia, Pennsylvania
(610) 853-4888
850 West Chester Pike Suite 205
Havertown, Pennsylvania 19083
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(410) 546-6415
Suite 500-A, 100 East Main Street
Salisbury, Maryland 21801
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Delaware Attorney Training

Delaware Attorney Ben Schwartz just underwent new training through DSBA (Delaware State Bar Association). Congratulations on being a member of the first class of certified Delaware Personal Injury and Commercial Law Arbitrators!

Delaware Attorney Training

TRANSCRIPT:

I am Attorney Ben Schwartz.

I’m very excited because I got a new professional certification recently. I underwent training through the Delaware State Bar Association, and I’m now a Certified Personal Injury Law Arbitrator. I also got my certificate to be a Certified Commercial Law Arbitrator.

This is a new program through the DSBA (Delaware State Bar Association). I am now certified to do training and certification as an arbitrator in personal injury litigation and commercial law litigation. An arbitrator acts as a judge. The arbitrator will take the plaintiff and the defendant and bring them together. He or she will conduct a hearing, review the exhibits and the documentary evidence that exists, and make a decision.

This is a new program to the DSBA, and I’m very excited! I just went through the program, and I’m in the first class of Delaware attorneys who are certified to do personal injury arbitration and commercial law arbitration.

If you’re a Delaware attorney, you can also go through the training program, even if other attorneys aren’t asking you to arbitrate their disputes. The training is still very valuable as a trial lawyer because you really gain understanding as to the nuts and bolts of this type of arbitration. Even though I’ve been doing arbitration and serving as an arbitrator for years, I still learned new information in this training.

I’m Attorney Ben Schwartz. I handle a lot of personal injury cases and fight for my clients every day. When something new comes along that piques my interest, I find it very exciting. If you have something that you’re excited about, let me know! If you have questions about arbitration: what it is or how it works, send me a question. Maybe I can answer it on the air.

Thanks very much for watching!

Delaware Attorney Training

Office Locations - Personal Injury Lawyer

Click or Call 1-855-TIP-THE-SCALES

We have offices conveniently located to provide expert legal representation in Delaware, Maryland, New Jersey and Pennsylvania.

Dover, DelawareWilmington, DelawareHavertown, PennsylvaniaSalisbury, Maryland
Dover, Delaware
(302) 678-8700
1140 & 1126 South State Street
Dover, Delaware 19901
Central Fax: (302) 678-8702
Directions & Map
Wilmington, Delaware
(302) 654-4930
1525 Delaware Ave.
Wilmington, Delaware 19806
Central Fax: (302) 678-8702
Directions & Map
Philadelphia, Pennsylvania
(610) 853-4888
850 West Chester Pike Suite 205
Havertown, Pennsylvania 19083
Central Fax: (302) 678-8702
Directions & Map
Salisbury, Maryland
(410) 546-6415
Suite 500-A, 100 East Main Street
Salisbury, Maryland 21801
Central Fax: (302) 678-8702
Directions & Map

In a hurry? Send us a quick Email.

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Delaware personal injury attorney Rob Collins recognized by National Academy

Schwartz & Schwartz is very pleased to congratulate Delaware personal injury attorney Robert C. Collins, II on his selection by the National Academy of Personal Injury Attorneys in its Top Ten Personal Injury Attorneys Under 40 in Delaware.

naopiabadgeRob is one of the First State’s top up-and-coming attorneys, so it’s no surprise that he received this recognition. Rob has handled hundreds of personal injury cases, and focuses his efforts on representation of victims of serious car accidents. Rob has additional experience in worker’s compensation matters, premises liability cases (slip-and-fall and trip-and-fall cases), and other types of personal injury cases.

If you have been injured in a car accident or other type of accident and you would like to speak to a Top 10 attorney under 40, please contact Rob for a free consultation.

Congrats Rob!

Ben Schwartz

Don’t skimp on automobile insurance — your kids may be the ones who need it after a serious car accident

Don’t victimize your kids by skimping on auto insurance!

ben-schwartz-workingI have had a number of Delaware car accident personal injury and wrongful death cases recently where parents unknowingly harmed their kids by skimping on auto insurance. Here are a few of examples:

1. Mother insured her vehicle with a Delaware minimum limits ($15,000) insurance policy. Her boyfriend was driving her somewhere in her vehicle. He ran a red light and pulled out in front of an oncoming truck. She was killed. Her children split a $15,000 insurance settlement. They each got about $3,000 for the loss of their mother.

2. Dad bought auto insurance for his son’s vehicle. He waved uninsured motorist coverage. Son had a very severe accident with an uninsured motorist. Not only did Son not get anything from the at-fault driver who was uninsured, but he got nothing from his own insurance company either. He could have had a million dollar Uninsured Motorist claim if Dad hadn’t waived coverage!

3. Dad had a $300,000 auto policy. When son turned 16, Dad bought him a vehicle and set up a new policy with a $100,000 limit. Son was then in an accident with catastrophic injuries. When they made claims with the insurance companies, they found out that the son was excluded from coverage on the Dad’s $300,000 policy. They thought he would have been included so that the son would have the benefit of both policies, but he wasn’t! The $100,000 limit was nowhere near enough to even begin paying medical bills.

These are just three examples of how insurance companies have taken advantage of parents who didn’t take time to learn about what they were doing. The insurance companies were happy to accept the policy premium payments from the parents, but when it came time to pay out to the kids for their losses from these very serious Delaware car accident cases, the insurance companies didn’t have to pay what they should have.

In the rush to get you to switch from your insurance company to theirs, the insurance companies cut out all types of important coverage. They leave you with a policy that does not provide you the coverage that you need.

When you buy discounted auto coverage, you should know that you may be leaving your kids hanging (as well as yourself). Rather than spending 15 minutes to try to save 15% on your auto coverage, why not visit a qualified insurance broker? Have the insurance broker review your coverages with you to make sure that you understand what you’re getting… and more importantly, understand what you are not getting.

Ben Schwartz

 

 

Should it be illegal to flash your headlights to warn others of police conducting a speed trap?

It it illegal to flash your headlights?

I was driving to work this morning and had a thought. Is it illegal to flash your headlights to warn others of police conducting a speed trap? Just north of the Dover, Delaware toll plaza, the grass in the median was real high, and I saw that a police officer had set up a speed trap in a cross-over and was running radar. After I passed him, I started feverishly blinking my high beams to warn approaching motorists to slow down. I blinked my headlights all the way to the toll plaza in the hopes of saving someone from the unpleasant experience of getting pulled over and ticketed for speeding.

illegal to flash your headlightsWhen I saw that police officer, I had a visceral reaction — I wanted to save people from getting tickets! But on the other hand, after about a minute of blinking, I started wondering whether I was doing the right thing. Is it illegal to flash your headlights? I am, after all, representing lots of people in car accident personal injury cases who were injured by irresponsible drivers who break the law (such as by speeding). By blinking my high beams, was I making the roadways less safe for the non-speeding, innocent motoring public?

When I got to the office, I started asking people whether they ever blink their headlights to warn others of speed traps or if they thought it was illegal to flash your headlights. Most people said something along the lines of “no, never, to heck with the speeders, let them get tickets”. One person asked if I’m crazy because I could get arrested for obstructing justice or something of that sort. So I decided to research the issue.

There is no specific Delaware law that I could find prohibiting people from flashing their headlights to warn approaching motorists of a speed trap, but I did find a law that says that flashing headlights are only to be used by first responders in fire and ambulance companies. Title 21 Del.C. Section 4348(d)(3) states:

“Flashing headlights may be installed upon any motor vehicle being used by a fire chief, assistant fire chief, fire engineer, fire police officer, police officer, a firefighter who is a member of any regularly established fire company or by an ambulance attendant who is a member of any regularly established ambulance service. Flashing lights shall only be installed if duly authorized by the fire chief or ambulance captain of the respective fire or ambulance company. The lights shall be used only in response to duty as a first responder.”

Of course, if you are considering breaking this law, the penalties are probably not going to drive you into bankruptcy. The fine for a first offense will be between $10 and $28.75.

I logged into Westlaw and searched the database of all Delaware case decisions to see if I could find any court decisions in cases where people flashed their headlights to warn others of speed traps. There were none.

I then found an article on the internet dealing with a Florida case where the Court decided that freedom of speech under the First Amendment gives people the right to warn other motorists of an impending speed trap. Click here: http://autos.aol.com/article/warning-other-drivers-of-speed-traps-is-constitutionally-protect/  Of course! The First Amendment! I don’t know why I didn’t think of that before. This is America, right?

So I think I’m probably legally OK flashing my headlights to warn people of speed traps. Even if a Delaware Court rules that in Delaware the First Amendment doesn’t protect this type of speech, I can afford the fine.

What I’m struggling with is this: Is it morally OK to warn others of a speed trap? Am I making the roads less safe by helping speeders evade the law? Am I wasting taxpayer dollars by doing this? I am, after all, paying taxes that are used in part to finance the police officer’s efforts. Or am I doing a service to my fellow citizens, who are almost all likely to be good people on their way to work, and who don’t need to have their day ruined by a speeding ticket?

Ben Schwartz

Illegal to flash your headlights