There are several states that consider all property owned by partners in a marriage to be "marital property." That means that money and tangible property is owned by both spouses equally, regardless of who earned the money, acquired the property, or brought the funds into the marriage. There have been several recent court cases that dealt with protecting the proceeds of an insurance settlement, personal injury settlement or auto accident settlement from being included in marital property and split between both spouses during a divorce proceeding. If you are planning to receive a settlement or have recently received a settlement, the following tips will help you protect these funds from being split with your spouse if you are facing an impending divorce.
Consult an Attorney
This tip cannot be stressed enough. It is imperative that you contact an attorney right away. The laws on divorce and marital property are different in every state. There are many nuances and loopholes that are difficult to uncover on your own, especially if you are not well-versed in legal terms and legal research. Your attorney will assess your entire financial situation and the circumstances of your divorce. Your attorney can then give you advice on how to proceed, and help you keep the funds from your settlement in your bank account where they belong.
Structure the Settlement Properly
Whether you have already received your settlement, or you are in the final negotiating stages, it is important to structure your settlement properly. Again, you need an attorney to help you with this. In the language of the settlement agreement, your attorney should include a clause that states that the proceeds of the settlement are yours and yours alone, and are not to be included as marital property. Again, the laws on this are different in each state, as is the accepted language, so you must have an attorney assist you with this task.
Separate Bank Accounts
Once your settlement is awarded to you, it is important to establish a bank account that is registered in your name only, so you can deposit the funds to an account that is yours and yours alone. If you deposit the funds to a joint account that is shared with your soon-to-be-ex spouse, it is much more difficult to extricate the funds from the settlement from other joint monies during the divorce.
Your attorney will be invaluable to you during the entire divorce and injury settlement processes. Your attorney will protect your interests, petition the judge to allow you to keep the funds awarded to you, and help you walk away from both proceedings with the most money possible. If you haven't retained the services of an attorney to help with your case, it is imperative that you do so immediately.