If my wife was awarded a lawsuit settlement before filing for divorce but is paid after the divorce is final, am I entitled to any money?

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If my wife was awarded a lawsuit settlement before filing for divorce but is paid after the divorce is final, am I entitled to any money?

She did not claim this on her divorce papers. I initiated the lawsuit because she didn’t want to deal with it. I was contacted by the lawyers about the final offer when she ignored them. We made a decision together to accept the offer and she filed for divorce a week or so later. I think she is trying to finalize it before she is paid.

Asked on October 15, 2012 under Family Law, Arizona

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You don't give much by way of details, so I'll assume we are talking about a personal injury award. That being the case, unless there is a legal separation agreement in effect, your spouse's rights to such a settlement remain the same as if you were in a stable marriage. However, the general rule is that if the settlement is to compensate for injuries, pain and suffering, loss of enjoyment, or medical bills that do not have any impact on the marital estate, then the settlement is treated as separate property (i.e. fully awarded to the injured person).

It should be noted that, some state courts have held that a personal injury settlement is marital property in certain situations:

  • If there is a commingling assets by accepting the entire settlement in one check made payable to both parties;
  • If it is compensation for lost wages; and
  • If they are for medical bills that have an impact on the marital estate.

In addition, when there is a lower settlement amount than what would have otherwise occurred due to low policy limits or a lack of funds from the responsible party, there is no abuse of discretion for a court to allocate a portion of the settlement to lost wages even when the settlement indicates that it is for personal injury only.

At this point you should consult directly with a local divorce attorney as to the specifics of your case.


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