How Is A Structured Settlement Handled In A Divorce?

If you were awarded a structured settlement as part of a personal injury case, you may be wondering whether you will have to surrender some of the cash to your soon-to-be ex-spouse in the event of a divorce. Like most legal issues, it depends on a variety of factors. Here's what you need to know about this issue to help you make the right moves in your divorce case to protect this asset.

When Did You Get the Money?

One factor that will have a big impact on whether your spouse gets part of your structured settlement is when you received the money. All states have laws separating personal property from marital property. Anything that's considered personal property remains the sole asset of the person who owns it. On the other hand, anything considered a marital asset is divided between both spouses, regardless of who actually owns it. For instance, a house in one spouse's name may be considered marital property and the value of the home split between both parties.

Whether a structured settlement is considered personal or marital property depends a lot on when you received it. If you got the money before you were married, then the court will typically relegate the settlement as personal property and leave it untouched. Settlements received during the marriage may be considered marital property that must be shared with your ex.

However, this is not always as clear cut as you would think. Sometimes personal property can be transformed into marital property and vice versa. If you use your spouse's money or co-mingled funds to pay for anything to do with your personal injury lawsuit, for instance, the court may rule your spouse has a stake in the settlement and convert it to marital property, even if you got the money before you were married.

What Damages and Losses Were Covered?

Another thing the judge will look at when deciding whether to give your spouse some of your structured settlement is what damages and losses were covered by the judgment. Some judges take a line by line approach and decide which part of the money can be considered personal property and which should be considered marital property.

For example, if you were given money to cover property damage, the court may feel your spouse deserves some of the cash if the item destroyed was a marital asset (e.g. a vehicle). Conversely, the judge may consider reimbursement for lost wages personal property since it is money you would have earned from your job.

As you can see, the division of a structure settlement in a divorce can be very complex. This is why it's essential you enlist the help of a divorce attorney who can help you sort out this issue and protect other assets you own. For advice or help with your divorce, contact a lawyer. Visit for more information. 

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