Click to call 602-254-8880 24/7 Click Here for Free Consultation

The Five Ways You Can Protect Your Personal Injury Settlement During A Divorce

After experiencing a tragic accident, some people may receive a personal injury settlement from the at-fault party; in some cases, this amount of money is significant. While the settlement may help with the calculable damages, damages to a relationship may be insolvable and could possibly lead to a divorce. The money from the settlement, or at least a portion of it, may be something both spouses feel they are entitled to have.

Division Factors

A personal injury award can be a significant portion of a couple’s assets. How this money is divided during a divorce will depend on a number of factors, including: whether the couple lives in an equitable distribution state or a community property state, the date the accident occurred, the date of the divorce, whether the personal injury award was itemized, etc. In this blog, we address a few of those factors, but ultimately suggest that if you relate to this situation, it may be in your best interest to contact both your DC personal injury lawyer and your divorce attorney to discuss what is best for you.

Community Property States

In these states, the divorce laws generally consider all assets acquired during the marriage to be marital property, and this property is owned equally by both spouses. Upon divorce, the property is divided equally. Property acquired prior to the marriage will generally be considered separate property.

Equitable Distribution States

In these states, if spouses cannot agree on the distribution of marital assets, it will likely be determined by a court. Factors taken into consideration during these proceedings may include each spouse’s individual contribution to the marital assets and all of the marital property involved. Assets can be distributed to a spouse instead of alimony, as part of one’s compensation.

No matter what kind of practice your state or residence upholds, here are a few helpful tips for those facing these kinds of circumstances:

  1. Avoid Joint Accounts

Avoid putting the settlement compensation into a joint account. This could be essential if you wants to maintain your settlement during a divorce. Co-mingling these funds in a joint account may increase the likelihood that the funds will be split after the divorce.

  1. Divide the Settlement

Make certain you know all the elements of your settlement.  This includes knowing what portion is for pain and suffering, lost wages, payment of medical bills or any other category your compensation may fall under. Any part of the settlement used or related to the spouse may be forfeited upon divorce.

  1. Don’t Use Marital Funds

It is important to avoid using marital funds for anything related to the accident. This includes medical bills, medical devices, rehabilitation and more. When a person is facing a divorce, it may be difficult to prove what funds were used to pay expenses. Were they paid from the settlement or from marital funds? The answer isn’t always clear.

  1. Get Spousal Agreement

During a divorce, a personal injury settlement will likely not be the only asset the couple will need to divide. If it is an amicable divorce, it is possible for a spouse to give up other assets in order to ensure they can keep the settlement. In some situations, this could benefit both spouses.

  1. Speak With An Attorney

An experienced divorce attorney will know their state’s laws and may be able to develop a pragmatic approach to protecting your settlement in your unique situation.

Thanks to our friends and co-contributors at Cohen & Cohen, P.C. for their added insight into this subject.

Click Here for Free ConsultationComparison Questions to Ask when Hiring a Lawyer


10.0 Superb Rating

AV-Highest Rated
Preeminent Lawyers


Super Lawyer
Southwest Super Lawyers®

Top 10 Attorney
National Academy of
Family Law Attorneys

Top 100 Lawyer
American Society of
Legal Advocates

Client Satisfaction Award
American Institute of
Family Law Attorneys

Lifetime Charter Member
Best Attorneys of America

American Association
for Justice

Charter Member
Trial Masters

Sustaining Member
Arizona's Finest Lawyers

Top Valley Lawyer
North Valley Magazine

Member Since 1989
American Bar Association

Sustaining Member
Arizona Trial
Lawyers Association