5 Ways to Protect Your Personal Injury Award or Settlement During a Divorce
A divorce proceeding is already a complex situation where financial futures often hang in the balance. If it is compounded with a personal injury settlement that happens to be substantial, things can get even nastier in court.
If you were injured and won a settlement but your spouse wants part of your money, it may be possible to protect your settlement. Unfortunately, there are some additional factors to take into consideration. The biggest determining factor of how marital property is divided comes down to the state you live in. To a lesser agree, you’ll also have to look at the amount of the settlement, the date of the accident that facilitated the settlement, whether the settlement was itemized, the date the divorce was filed, and a few more factors.
Community Property States vs. Equitable Distribution States
In a community property state, laws regarding divorce and property state that all money, property, and other assets gained during the marriage are equal marital property. Typically, the property is divided equally unless a couple mutually agrees to something else. Any property acquired before marriage is considered separate.
In equitable distribution states, a court decides who gets the assets if the spouses cannot come to an agreement. Generally, the court will consider what each spouse had contributed to the marriage, and assets can also be used as alimony. No matter what state you live in, there are still some defenses to use in order to keep the settlement money.
While you may find these tips helpful, it would still be wise to retain a divorce lawyer in Bloomington IL immediately. Your lawyer can help develop a more in-depth and personal strategy for how to keep your settlement money during a divorce.
1. Do Not Use Joint Accounts
Put the settlement into an account with your name on it only. This can end up being crucial down the road if you and your spouse disagree about your settlement. Keeping this money in a single account implies it was never meant or expected to be shared. Putting it in a joint account increases the chances of it getting split.
2. Divide the Settlement
Be sure you know all facets of the settlement. For example, be aware of what components are intended for pain and suffering, medical bills, lost wages and other losses. Certain components could be considered joint property, but other components aren’t as likely to be divisible.
3. Avoid Using Marital Funds for Accident-Related Costs
This might be hard if you rely primarily on a joint bank account, but try to avoid using marital funds for anything the accident is responsible for. This includes medical equipment, medication, hospitals bills, therapy, or any other special needs. This could help clarify that your spouse did not spend any of his/her own money on your accident-related costs, and therefore he/she does not deserve compensation.
4. Consider Mediation
Sometimes mediation is possible in an amicable divorce. This means there is a possibility your spouse will sign an agreement for you to keep your settlement.
5. Talk to a Lawyer
An experienced divorce lawyer will know your state’s laws well. They probably have experience in helping clients defend their settlement. Always look for a combination of skill and experience, so your lawyer can develop a strategy to help you keep your money.
Getting divorced is complicated business, and it can take years to finally sever ties. If there is money involved and your spouse wants it, there is a chance the spouse will get part of it. There is also a chance that a lawyer can successfully prevent that from happening.
Thanks to our friends and contributors from Pioletti & Pioletti for their insight divorce law practice.