Getting into an accident that causes you personal injury can be traumatic and painful.
But, imagine having to deal with a divorce on top of that? You’d have to endure both the physical pain caused by your injury and the emotional hardship that comes with a divorce.
That’s why it’s important to know if a personal injury settlement gets divided during divorce.
The answer is not always straightforward. It depends on various factors like the state you live in, whether there is a prenuptial or postnuptial agreement, and other variables. If you are in such a situation, or you might encounter one in the future, this article will help you understand how personal injury settlements are dealt with during a divorce.
Overview of Personal Injury Settlements
In most cases, a personal injury settlement is an agreement between two parties. The responsible party (or their insurance company) agrees to pay the other party for damages incurred as a result of an accident or incident. This type of settlement is usually reached through negotiations, mediation, arbitration, or litigation.
For a settlement to be valid, both parties must agree to all the terms. If not, the matter usually goes back to court for resolution. Once the settlement is agreed upon, both parties gain closure and finality without any blame or fault assigned, which is preferable to a long drawn-out court battle.
But what happens when there is a divorce? Does it impact the division of personal injury settlements?
In some cases, the settlement may be subject to equitable distribution by the court, which means it could potentially be divided during the divorce. To understand how this might affect individual settlement awards, it is important to consider both state laws governing marital assets and any special terms or provisions included in the settlement agreement.
There are broader implications, too, such as whether a settlement award acquired after marriage but before divorce proceedings have begun should be considered separate property. Ultimately, all parties involved will need to work with their respective attorneys to ensure that everyone’s rights are adequately protected under applicable law and any underlying legal documents related to the settlement itself.
Determining How Assets Are Divided In Divorce
During a divorce, all marital assets—including personal injury settlements—must be divided between both parties involved in the proceedings. Debts accumulated during the marriage must also be split equally unless otherwise negotiated in a legal agreement. Such an agreement could be a prenuptial agreement or postnuptial agreement. These agreements should be discussed with a family law attorney to protect individuals from financial losses due to asset division during a divorce proceeding.
Property Division During Divorce
Property division is a complicated and time-consuming process, especially if you have high net worth assets or multiple properties involved.
Basically, you’ll have to figure out who gets what assets. Each party is usually trying to keep as much of their own assets as possible, which can create some tension. And don’t forget about taxes – they come into play for certain items like stock options that might need to be sold off.
Now, what about personal injury awards?
These don’t always get split up evenly in a divorce settlement. Instead, the court will look at who was awarded the award initially and consider other factors like any contributions made by either spouse towards costs associated with the lawsuit. After that, they’ll decide on how much each person should get. It’s a tricky situation, which is why it’s important to talk to a lawyer beforehand so you know your rights and obligations regarding any potential settlements related to your case.
How To Protect Your Personal Injury Settlement During Divorce
Divorces are already complicated enough, and the last thing you want is for your settlement money to end up in the hands of your ex-spouse. So, what can you do to prevent that from happening?
First things first, you need to know that civil court settlements aren’t typically subject to division by family courts. This means you don’t need to worry about your settlement being split in half. However, there are still some things you need to do to ensure your settlement remains solely yours.
To start with, you and your attorney should draw up a clear agreement that specifies any financial obligations related to the settlement. This includes making sure all payments go directly into a separate account that’s set up solely for this purpose. You should also clearly outline who will be responsible for paying taxes on the funds.
The next step is to make sure there’s no mixing of marital assets or debts with those related to the settlement. Keep track of any expenses associated with pursuing the case, and avoid using joint accounts or investments when settling it.
It’s also important to keep detailed records throughout the entire process and have them available if necessary. Having documentation like receipts and bank statements can help prove your ownership over the funds in question should any disputes arise down the line.
By taking these few simple measures, you can ensure that your personal injury settlement remains yours and yours alone. This will also help facilitate an amicable resolution between you and your ex-spouse, which is always the best outcome.
Need Help Protecting Your Personal Injury Settlement? Contact Injury.io
When it comes to personal injury settlements, the division of the settlement during a divorce is not straightforward. The state laws, type of marital agreement, and any special terms or provisions in the settlement agreement can affect how the settlement is handled during divorce proceedings. It is essential to seek legal advice from an experienced attorney to protect your rights and understand your options.
Contact the Injury.io team for help finding the legal representation you need.