How Will A Personal Injury Award Affect My Alimony Payment?
As part of the divorce agreement, you may be required to pay alimony to your spouse. The amount of the alimony payments is determined in large part by how much money you make versus your cost of living. Another factor that’s considered is the amount of income or other financial resources already at your former husband or wife’s disposal.
Request Payments Be Reduced
If your injury precludes you from working or from making as much money as you did in the past, it may be possible to ask for a spousal support modification. A judge may take into account the fact that you no longer work or do not have the same earning power that you did in the past. However, if an award compensates you for lost future earnings, your request for lower payments may be denied. One possible benefit of alimony payments is that they may be a tax write-off under certain circumstances. A tax attorney or accountant can review your situation and offer guidance.
Your Former Spouse May Ask for Increased Payments
It is possible that your spouse could ask for payments to be increased based on the personal injury award that you are granted. In some cases, it may be possible for a judge to order you to pay a lump sum to your former husband or wife. As with your modification request, a judge will review your financial circumstances as well as those of your former spouse to determine if there is reason to increase alimony payments going forward.
Do You Have a Prenuptial Agreement?
In the event that you and your ex had a prenuptial agreement, it may spell out how much alimony either party is entitled to after a divorce. It may also specify how alimony amounts are calculated. Therefore, it is possible to exclude certain sources of current or future income such as an inheritance or money obtained from a personal injury lawsuit.
Typically, that would be included in the agreement if a marriage took place while the case was still pending. If you think that you will settle the case during the divorce process or soon after the divorce is final, you may want to create a postnuptial agreement. This may address whether settlement funds are used to calculate alimony payments.
Do You Have Any Children?
If you have children, you may be ordered to give a portion of the personal injury award to your spouse to be used for child support purposes. Another option may be to put a portion of the settlement into a trust or college fund for your child in lieu of giving it directly to your spouse. This may be an effective compromise for former lovers who no longer get along but maintain a relationship for the sake of their child or children.
Does Anyone Else Have a Claim to the Money?
When an individual files for Chapter 7 bankruptcy, certain assets become property of the bankruptcy estate. If you settle your personal injury case before filing for bankruptcy, the award may be used to help pay off some or all of your existing debts. While this may not totally absolve you of your requirement to give some of the money to a former spouse, it may be a relevant factor when determining how much he or she should receive.
If you are seeking compensation after being hurt in an accident, it may be a good idea to talk to a personal injury lawyer DC trusts first. He or she can provide you with more information about personal injury law and what can happen to the settlement award that you receive.
Thanks to our friends and contributors from Cohen & Cohen, P.C. for their insight into the effects of a personal injury award on alimony.