Should I Wait to Divorce Until After Settling a Personal Injury Claim?
Much of the stress involved in a divorce is rooted in money, and determining the allocation of finances. Typically, anything acquired outside of the marriage remains with the initial owner, while anything obtained during the marriage is subject to divide. If a personal injury case is involved, matters may be complicated. The question of ‘who gets who’ in this case does not have one straight answers, especially if neither the divorce nor the personal injury case has been finalized. Speaking with a personal injury lawyer, as well as a divorce lawyer, about your specific situation may provide clearer answers. Meanwhile, there are many things about your case to consider.
How the Courts Determine Personal Injury Settlements in Marriage
Each state treats a personal injury settlement in a marriage differently. Some states consider an entire personal injury settlement as separate property. Other states may consider parts of the settlement as separate property and other parts as marital property. These considerations rely largely on the damages that were compensated for in the settlement.
Personal damages, including pain and suffering or medical bills, are usually considered by the courts to be separate property, because they are thought to belong to the injured person. The courts, however, may consider damages such as loss of consortium as marital property, because the damages may have affected both spouses.
How a Personal Injury Settlement Will be Affected by Divorce
If your divorce and personal injury case overlap, you may wonder how best to protect the settlement award you expect to receive. The way in which a divorce will affect the settlement depends on a number of factors, including:
- The state in which you reside
- The date of the claim/settlement
- The date of the divorce decree
- Different components of the settlement
Generally, if the settlement occurs before the divorce decree, then it may be considered marital property, and thus, subject to division. If the settlement occurs after the decree, then the settlement likely won’t be divided. Each state has a different jurisdiction for estate division in a divorce and how a personal injury settlement is allocated in a marriage. In some cases, depending on the state laws, a settlement may still be considered marital property after the divorce has been finalized.
Because the allocation of a personal injury lawsuit amid a divorce is dependent on so many different factors, you should seek legal counsel before making any decisions.
If You Have Already Filed for Divorce
If your goal is to protect your settlement from being divided, then you should keep any funds from the settlement separate from marital property. If any part of the settlement is spent on shared property or deposited in a shared account, then the courts may consider them as commingling assets, meaning they may be subject to division. To be safe, it is advised to keep all funds collected from the settlement in a personal account separate from your soon-to-be former spouse.
Thanks to our friends and contributors from the Law Firm of Frederick J. Brynn for their insight into personal injury practice.