How Do Personal Injury Settlements Affect Equitable Distribution In Divorce?

People exchange marriage vows in which they promise to remain together in sickness and in health and in poverty or in prosperity, but physical and financial hardships put more strain on marital relationships than most newlyweds realize.  You don’t know how a chronic illness or a situation where one spouse must leave the workforce involuntarily will affect your relationship with your spouse unless it happens to you.  When you read news headlines about personal injury lawsuits where the court awarded an injured plaintiff hundreds or thousands of dollars in damages, or even more, your first instinct might be to grumble about how greedy the plaintiffs and their lawyers are; it would be nice if someone gave you $100,000 just because you asked instead of you having to work to the point of exhaustion day after day and year after year.   What you don’t realize is that personal injury settlements are only enough to compensate injured people for the amount of money they would have earned, and would not have had to spend on medical bills, if not for the injury.  In many cases, the settlement money goes to the support of the plaintiff’s spouse and children, but does that mean that the court can order the injured person to share the settlement money with his or her former spouse in a divorce?  If the proceeds of a personal injury settlement form a substantial part of your household income, but you and your spouse are considering divorce, contact a Birmingham divorce lawyer.

Was Your Personal Injury Settlement Meant to Support You or Your Spouse?

Money paid to plaintiffs in personal injury lawsuits, whether through a settlement or a judgment at trial, normally counts as the injured person’s separate property.  If you keep your personal injury money in a separate bank account, there is a good chance that the divorce court will not order you to share it with your ex-spouse if the case goes to trial.  If you deposit it in a joint bank account with your spouse, though, your spouse can persuade the court that the money is marital property because you treated it as such.

Alabama case law shows that judges consider the intended use of the settlement money.  If you used your employment income to support your spouse before you got injured, it stands to reason that you requested economic damages for lost income in your personal injury case so that you could continue supporting your spouse.  The situation is clearer if both the injured person and his or her spouse were plaintiffs in the personal injury case, but case law contains instances where the court ordered a spouse who had received personal injury lawsuit income to pay part of the lump sum to his or her ex-spouse in the couple’s equitable distribution scheme.

Contact Peeples Law About Divorce After a Serious Injury

A Birmingham family law attorney can help you if you are getting divorced, and a personal injury settlement is your main source of financial support.  Contact Peeples Law today to schedule a consultation.

Source:

scholar.google.com/scholar_case?case=10004455392620074822&q=divorce+deposit&hl=en&as_sdt=4,61,62,64&as_ylo=2014&as_yhi=2024