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A wife drives down a busy city street. She doesn’t see the car that runs a stop light. The wife is hit and seriously injured. Her damages are significant, and she hires a personal injury attorney. The attorney files a claim and the case is pending in court.
Three months later, the wife files for divorce. She meets with an attorney to talk about the case. She asks the attorney if she should wait to file for divorce until she settles the personal injury claim. The answer is yes and no. Read on to understand why the answer depends.
Personal Injury and Divorce Sometimes Overlap
According to the National Highway Traffic Safety Administration, there are more than six million traffic crashes in the United States each year. There are also more than 800,000 divorces in the United States each year, according to the Centers for Disease Control and Prevention. That means divorce and personal injury sometimes overlap. The question then becomes whether a settlement from a personal injury case is part of the marital property to divide during the divorce.
In most cases, you should file for divorce.
The full answer is that it depends on your state and a number of factors but generally, there’s nothing to gain by waiting to divorce until your personal injury claim settles. If the settlement from the personal injury claim is part of the marital estate, it’s going to be part of the estate regardless of when you divorce. If it’s not part of the marital estate, you can collect the settlement in its entirety regardless of when you file.
Factors Used by Courts to Make Rulings
Whether or not a personal injury settlement is marital property depends on a number of factors.
In many cases, the court treat proceeds from a personal injury settlement as separate property regardless of when the injury occurred.
Each state’s laws are a little bit different, so it’s important to check with a family lawyer you can rely on in your location.
Some jurisdictions look at what types of damages a person recovers from their personal injury lawsuit. If the damages are for pain and suffering or medical bills, the courts might see those types of injuries as a separate property that belong just to the injured person.
If the damages include loss of consortium, there’s a greater chance that the court might see the damages as joint property.
A Potential Settlement May Be Considered Marital Property
Even if an injured person hasn’t received the settlement by the time they file for divorce or their divorce is finalized, the impending settlement can still be considered marital property. If the injured person lives in a state where this is true, it doesn’t matter if the settlement is finalized. In those cases, the potential settlement is marital property.
Each case is different and the laws vary by state, so it’s important to speak with a qualified family law attorney before you make decisions about your case.
After You file
It’s important to keep funds from the personal injury settlement separate. It may be wise to not deposit the funds in an account shared with the soon-to-be former spouse. Otherwise, the court might see it as commingling assets. Consult with a family law attorney for legal advice specific to your unique situation.