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3 Ways to Protect Your Personal Injury Award or Settlement During Divorce

Posted on : June 7, 2017, By:  Hildebrand Law
3 Ways to Protect Your Personal Injury Award or Settlement During Divorce

3 Ways to Protect Your Personal Injury Award or Settlement During Divorce

Nothing can be more satisfying than winning a personal injury case and receiving compensation for your losses from the incident. However, if you are going through a divorce or planning to dissolve your marriage, it is essential to determine what will happen to this compensation. Will you be able to keep the entire amount or will it be subject to a distribution like other community property?

Personal Injury Awards and Settlements

Personal injury settlements provide compensation for bodily harm and other damages that are caused by the negligence of the responsible party. The plaintiff is likely to be awarded compensation for:

  • Present and future medical expenses
  • Medical treatment bills
  • Lost wages
  • Damage to personal property
  • Loss of consortium
  • Future loss of earnings
  • Pain and suffering

3 Ways to Protect Your Personal Injury Award or Settlement During Divorce
Depending on your case, a personal injury settlement can constitute a significant portion of your total combined assets. Several factors may determine whether a personal injury award should be divided between spouses during a divorce proceeding, including:

  • The date of filing for dissolution of marriage
  • The date of the accident
  • The allocation of money or whether the award was itemized
  • Whether you live in an equitable distribution state or a community property state

In equitable distribution states, all property and assets acquired during the marriage by either spouse will be subject to division. The distribution is done in a way that the courts deem fair – mostly it is based on the contribution of each spouse in the total marital property.

In community property states, on the other hand, all property and assets obtained during marriage are considered part of marital property. Since the law dictates the assets to be owned equally by both spouses, it is subjected to division equally in a divorce as well. Even if both spouses keep their property in separate accounts, they will still be part of the marital property. Only those assets acquired before marriage will fall under the category of separate property.

How to Protect Your Injury Award During Divorce

Here are three ways you can protect your injury settlement from being divided during your divorce:
3 Ways to Protect Your Personal Injury Award or Settlement During Divorce
1. Maintain a Separate Account: After winning a personal injury settlement, make a separate bank account to keep the award money. It is imperative that you do not mix this amount with the funds in your joint or community account unless you consult with your attorney. Doing so will not only keep your money from being re-allocated as part of your divorce but will also prevent the commingling of assets.

2. Consult your Attorney: If you are going through a divorce at the time of a personal injury settlement, make sure you discuss the possibilities with your injury lawyer. If you are working with a divorce attorney, inform them about the award so that they can provide legal advice to prevent it from distribution.

3. Opt for a postnuptial or Prenuptial Agreement: With the help of a postnuptial or prenuptial agreement, you can designate personal injury awards as a separate property. This will keep the settlement amount from being considered as a community property during the divorce proceeding.

When settlements or awards for personal injury or any other claims are part of a divorce, matters tend to get out of hand. It is best to work with an attorney to evaluate ways to keep your spouse from taking away a share of your newly acquired asset.

Law Office of Eric A. Luckman, P.A.Thanks to our friends and contributors from Law Office of Eric A. Luckman, P.A. for their insight into protecting your injury award or settlement during divorce.


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