What to do about a pending lawsuit settlement if I divorce?

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What to do about a pending lawsuit settlement if I divorce?

I want to file for divorce and was injured this past summer. There is a lawsuit pending. If/when I receive a settlement, does it belong to me or is it considered marital assets? Is he entitled to any of it if we are still married? If we are legally separated or divorced?

Asked on December 27, 2011 under Family Law, North Carolina

Answers:

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

Answered 9 years ago | Contributor

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 need to consult directly with a divorce attorney in your area as to the specidics of your case.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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