Pre-settlement planning is essential to ensuring each spouse gets their fair share of any personal injury settlement.
Following a serious accident, your personal injury award could become a very important asset. If you are left permanently disabled, unemployed, and facing ongoing medical costs, it may be making the difference between getting by and financial ruin.
So you may very well wonder…
…what happens to my personal injury settlement if I get divorced?
There is really no simple answer to this question. It all depends on your specific situation, including when you were injured, what types of damages you received, and whether you commingled these funds into shared accounts or assets.
If you were injured before the marriage—and especially if you began receiving settlement payments beforehand—your settlement will almost certainly be considered personal property rather than marital or community property.
However, if your injury occurred during the marriage, things can become much more complicated. Various courts have issued rulings all over the spectrum, from deciding that personal injury settlements are by nature “personal” and belong only to the injured victim, to deciding that any income received during the marriage is marital property to be divided evenly, to painstakingly combing through each element of the damages included in the settlement to determine which ones apply to which spouse. For example, while damages associated with medical bills could be said to belong only to the injured person, damages associated with lost income or lost earning potential could be said to belong to both spouses, since they are replacing regular job income that would have been shared marital property.
How to Protect Your Personal Injury Settlement In Case of Divorce
With divorce rates so high in this day and age, it simply seems practical to consider the possibility of divorce when making important financial decisions. This is especially true if you have any inkling at all that you and your spouse may end up needing to separate.
There are in fact a few steps you can take before accepting your personal injury settlement that will help make an easier division of the property if you do ever divorce:
Get a Family Attorney Involved: The earlier you advise your personal injury attorney of your concerns about the eventual division of your settlement, the better. Your attorney can then bring in an expert in family law to provide advice about how to approach the matter.
Make Sure Damages Are Specific: Your attorney can request that your settlement include a very clear description of which amounts have been allocated to cover which damages. This will help prevent future arguments over how much of the money covered damages suffered by the victim alone and how much covered damages suffered jointly.
Maintain a Separate Bank Account: If you simply deposit your settlement into your regular shared bank account, it will become very difficult to trace what happens to the money. Even if the funds were covering personal damages rather than shared losses, using them to pay for a shared marital asset like a house can confuse matters. If you are concerned about the possibility of divorce, it is better to keep the funds in a separate bank account from the start and use them primarily to cover needs related to the accident.
Need Help With a Personal Injury Claim?
If you need help with a new claim for any kind of accident or injury, contact The Law Offices of Fernando D. Vargas at 909-982-0707 now. We will be happy to set up a free initial consultation for you.
