Calculating wrongful death damages requires translating devastating personal losses into dollar figures. This process combines financial analysis, economic projections, and valuation of intangible losses to arrive at a comprehensive damages figure. Understanding how damages are calculated helps families evaluate settlement offers and prepare for litigation.

Wrongful death damage calculations involve both objective financial analysis and subjective valuation of non-economic losses. Expert witnesses typically play crucial roles in presenting these calculations to juries.

Calculating Lost Earnings

Lost earnings calculations project what the deceased would have earned over their remaining work life, then reduce that amount to present value.

Step 1: Establish Baseline Earnings

The starting point is the deceased's actual earnings at the time of death:

  • Salary and wages from employment records
  • Historical earnings from tax returns (typically 3-5 years)
  • Bonus and commission history
  • Benefits value including health insurance, retirement contributions, and other perks

For self-employed individuals, calculating baseline earnings may require analyzing business financials, separating personal income from business reinvestment.

Step 2: Project Future Earnings Growth

Economists project how earnings would have grown over time based on:

  • Career trajectory – Was the deceased likely to receive promotions, change careers, or advance professionally?
  • Industry trends – How do wages typically grow in the deceased's field?
  • Education and skills – Did the deceased have credentials that would lead to higher earnings?
  • Historical wage growth – What raises had the deceased received in recent years?

Step 3: Determine Work Life Expectancy

Projections extend through work life expectancy—the age at which the deceased would likely have retired. Factors affecting this determination include:

  • Occupation (some careers have earlier retirement ages)
  • Health status before death
  • Family history of longevity
  • Stated retirement plans
  • Statistical work life tables

Step 4: Reduce to Present Value

Future earnings must be discounted to present value because a dollar received today is worth more than a dollar received years from now. Economists apply a discount rate—typically based on safe investment returns—to calculate the lump sum that, if invested today, would replace the deceased's projected earnings stream.

The discount rate significantly affects the calculation. A higher discount rate produces a lower present value, while a lower discount rate increases the damages figure. The appropriate rate is often contested between plaintiffs and defendants.

Example Calculation

Consider a 35-year-old earning $75,000 annually with expected 3% annual raises, planning to work until age 65:

  • 30 years of remaining work life
  • Projected total earnings: approximately $3.5 million (nominal)
  • Present value at 3% discount rate: approximately $1.8 million

This simplified example excludes benefits, personal consumption deductions, and other adjustments that would affect the actual calculation.

Calculating Lost Financial Support

Not all earnings translate to family support. The deceased would have spent a portion on personal consumption—their own food, clothing, entertainment, and other individual expenses.

Economists calculate the personal consumption rate based on:

  • Family size and composition
  • The deceased's spending patterns
  • Research on consumption in similar households

Personal consumption typically ranges from 25-40% for married individuals with children, higher for single individuals or those without dependents.

Lost financial support equals total projected earnings minus personal consumption.

Calculating Lost Household Services

Household services valuation requires documenting what the deceased did and valuing that labor:

Identifying Services

Common household services include:

  • Childcare and supervision
  • Cooking and meal preparation
  • Housecleaning and laundry
  • Home maintenance and repairs
  • Yard work and landscaping
  • Transportation (driving children, errands)
  • Financial management
  • Healthcare coordination

Quantifying Hours

Family members testify about the deceased's typical week, estimating hours spent on each category of service. Time diary studies and household surveys provide supporting data.

Applying Market Rates

Each service category is valued at market rates:

  • Childcare: $15-25/hour (or local daycare rates)
  • Housecleaning: $20-35/hour
  • Home repair: $50-100/hour for skilled work
  • Yard work: $25-50/hour

These hourly values are multiplied by projected hours over the deceased's life expectancy, then reduced to present value.

Calculating Medical Expenses

Pre-death medical expenses are typically straightforward—totaling all bills related to the fatal injury. However, issues can arise:

  • Write-offs – Should damages reflect billed amounts or the lower amounts actually paid after insurance adjustments?
  • Causation – Which medical expenses relate to the fatal injury versus pre-existing conditions?
  • Reasonableness – Were the treatments necessary and the charges reasonable?

Calculating Non-Economic Damages

Non-economic damages lack market values, making calculation inherently subjective. Several approaches exist:

Per Diem Method

The per diem approach assigns a daily value to the loss, then multiplies by the number of days the survivor will experience that loss.

For example, a spouse might argue that losing a partner's companionship is worth $100 per day. Over a 30-year life expectancy, that equals $1.095 million.

Courts in some jurisdictions prohibit per diem arguments as too arbitrary.

Multiplier Method

Some attorneys calculate non-economic damages as a multiple of economic damages—for example, two to three times the economic loss.

This approach has no scientific basis but provides a rough framework for valuation.

Comparable Verdicts

Attorneys may reference verdicts in similar cases to establish a range of reasonable compensation. However, every case is unique, and juries have wide discretion in valuing non-economic losses.

Factors Increasing Non-Economic Awards

  • Extremely close relationships with strong evidence of devotion
  • Young children losing a parent
  • The defendant's conduct was particularly egregious
  • The death involved suffering or was witnessed by family
  • The family's grief has been severe and documented

Present Value Calculations

Most future damages must be reduced to present value. The present value formula considers:

  • Future value – The total projected damages in nominal (future) dollars
  • Discount rate – The assumed rate of return if the damages were invested
  • Time period – The number of years until damages would have been received

Present Value = Future Value ÷ (1 + discount rate)^years

The discount rate dramatically affects present value calculations. A 2% discount rate produces much higher present values than a 5% rate. Plaintiffs and defendants often dispute the appropriate rate.

The Role of Expert Witnesses

Wrongful death damages calculations typically require expert testimony:

Forensic Economists

Economists calculate lost earnings, lost household services, and present values. They testify about:

  • Methodology and assumptions
  • Data sources and industry research
  • Alternative scenarios and sensitivity analysis

Vocational Experts

When the deceased's career trajectory is disputed, vocational experts may testify about likely career advancement, earnings potential, and work life expectancy.

Life Care Planners

In cases where family members need ongoing services previously provided by the deceased, life care planners may project those costs.

Mental Health Experts

Psychologists or psychiatrists may testify about family members' grief, emotional damages, and treatment needs.

Defendant's Counter-Calculations

Defense economists typically present lower damages calculations by:

  • Using higher discount rates
  • Projecting lower wage growth
  • Assuming earlier retirement
  • Increasing personal consumption deductions
  • Questioning the deceased's career trajectory

Juries must evaluate competing expert opinions and reach their own conclusions.

Practical Considerations

Documentation Is Essential

Strong damages calculations require comprehensive documentation. Gather:

  • Several years of tax returns
  • Employment records and pay stubs
  • Benefit statements
  • Evidence of career advancement and recognition
  • Documentation of household contributions
  • Photos and evidence of family relationships

Calculation Timing

Damages calculations are typically prepared during litigation, but preliminary estimates help evaluate cases early. Attorneys often obtain initial economist consultations before filing to understand the potential recovery range.

Settlement Negotiations

Both sides' damage calculations inform settlement negotiations. Understanding how your damages were calculated—and the assumptions that could be challenged—helps evaluate settlement offers realistically.

Conclusion

Calculating wrongful death damages combines financial analysis, economic forecasting, and valuation of intangible losses. The calculation methodology significantly affects the damages figure, making expert witness selection and preparation crucial.

An experienced wrongful death attorney works with qualified experts to develop comprehensive, defensible damages calculations that maximize recovery while withstanding defense scrutiny.