What happens to your money from a personal injury award or settlement, when you divorce? The short answer is, “It depends.” It depends on whether you live in a community-property or equitable distribution state. It depends on how the money was allocated in the award or settlement. It depends on the date of the accident, the date of your separation or the date of your divorce. How the money is divided up depends on how the court in your state will approach the analysis based upon the specific details of your case.
The various scenarios go something like this:
- Husband and Wife have been married for eight years and have three young children. Wife suffered a significant delay in diagnosis of her breast cancer, when her mammography studies were misread. By the time she was finally was diagnosed, the cancer had spread throughout her body, and she was forced to take a leave of absence from her job to undergo chemotherapy and radiation treatments. During this time, Wife was unable to care for herself or her family, and Husband was trying to hold down his job and care for his family. Husband and Wife contacted an attorney regarding a medical malpractice case, and suit was filed against the doctor, who misread the mammography study. The claim included damages to the Wife, as well as a loss of consortium claim for the Husband. During the pendency of the litigation, Husband and Wife decided to divorce. Question: What happens to any proceeds acquired from the lawsuit?
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