Will a Personal Injury Settlement Be Considered a Marital Asset?
For most people, divorce is a difficult experience, emotionally and financially. In addition, dissolving a marriage can be more complicated when the couple has assets that are somewhat difficult to divide fairly. A personal injury settlement is a good example of this. Though personal injury settlements are not always considered marital property, there are some circumstances when they might be divided as a marital asset in a divorce.
The Argument Against Including Personal Injury Settlements as Marital Assets
- The person who receives the settlement often has expensive medical bills to pay, sometimes a lifetime of medical care and bills.
- Some of the settlement money may be designated for the victim’s pain and suffering, which the victim’s spouse does not suffer.
Exceptions to the Rule
- Funds are placed in a joint account with the intent of using them to pay general household expenses.
- The settlement primarily reimburses lost wages for a period during which the uninjured spouse supported the household.
- The personal injury settlement is the primary source of income for the household.
- The settlement is intended to cover damage to marital property, such as a car or house.
Protecting a Settlement
Even in a happy marriage, it is important to take steps to protect a settlement in the case of eventual divorce. For instance, a family lawyer Arizona relies on may recommend that you keep the settlement in a separate account from the joint account so it does not become communal property. It is also important to keep records of how the settlement money is spent. A person who can show that the money is earmarked for, and currently used for, specific needs resulting from the personal injury will stand a better chance of keeping it in the case of a divorce. A personal injury lawyer can advise you on how to set up your settlement so it is protected throughout your lifetime.
Personal injury cases are complex in every way. The companies and entities responsible for such an injury often have a team of lawyers on their side. It is important that you as an injured party also have legal assistance to effectively make your case. If a personal injury settlement is part of your or your estranged spouse’s assets, it is also important to talk to a lawyer immediately. The laws regarding these cases are simply too complex to handle alone.