How a Civil Suit Settlement Could Be Divided in a Divorce
If you have been hurt in an accident, you could be entitled to thousands of dollars or more from the party responsible. However, it is possible that the money could be subject to division if your marriage ends. What can you do to protect some or all of your settlement during the divorce proceeding?
Pay Your Expenses From a Solo Account
If you can, pay your medical expenses and other costs related to your injury using money from an account in your name only. This may make it easier to claim that at least some of the settlement is separate property that is not eligible to be divided. In such a scenario, any money that is earmarked to pay you back for medical expenses paid with money from your own account would not be marital property.
Make Changes to a Prenuptial Agreement
A prenuptial agreement is an agreement between a married couple that generally defines what is considered separate and marital property in that specific relationship. It may be possible to update the terms of such an agreement to include how any money won in a personal injury lawsuit or obtained in a settlement should be divided. It may also be possible to create a new agreement that governs how the money is to be treated in the event of a divorce.
The Settlement Could Be Excluded Altogether in Divorce Talks
A divorce settlement is generally the end result of several weeks or months of negotiations. Your attorney, like a divorce lawyer relies on, may be able to suggest ways that you can keep the entirety of the settlement in exchange for giving up other assets. For instance, you might agree to give up ownership of the marital home in exchange for retaining 100 percent of your settlement.
Do You Need the Money to Live?
The job of a personal injury lawyer is to get his or her client the money necessary to pay bills and maintain a reasonable lifestyle after an accident. If you cannot work or make money for yourself because of the accident, you could claim that splitting all or part of the settlement could create a financial hardship. If your spouse makes more money than you do or is otherwise financially secure without a portion of your settlement, a judge may award you that money with no need to give anything up in return.
Funds in a Trust Generally Can’t Be Touched
If you are concerned that your former spouse will want some or all of your settlement in a divorce, you may want to put the funds in a trust. As long as it is worded properly, the language within the trust determines when and how it can be used. The trustee is the only one who can make decisions about when money is to be distributed from it, and he or she is bound by the terms and conditions of the trust.
It is possible that a settlement or jury award from a personal injury lawsuit could be divided in a divorce. How it is divided depends on state law and any actions that you may have taken to protect your money. Talking to an attorney may be the best way to learn more about how to keep the cash that you may need to provide for yourself and your kids.