Alimony is paid from one spouse to the other after a divorce to help an individual retain his or her standard of living. In some cases, proceeds from a personal injury settlement are used to calculate how much you may be required to provide to your former husband or wife. Let’s look at how a financial award may influence the amount of spousal support that you may be ordered to provide after your marriage ends.
Is There a Prenuptial Agreement?
If you have a prenuptial agreement, it might specify how much you are required to provide your former spouse in a divorce. In some cases, this amount may be based on your net worth or on your income for a set period of time. Therefore, if you receive a settlement, you might be required to give a certain percentage of it to your former husband or wife. However, it may also be possible to include terms in a prenuptial agreement that exempt any settlement award from alimony calculations.
You Might Be Asked to Make a Lump Sum Payment
If your personal injury attorney arranges for your settlement to be a lump sum payment, you might be asked to make a lump sum alimony payment using those funds. In some cases, this payment will satisfy your spousal support obligation in its entirety. However, if you are able to go back to work or otherwise make money, additional payments may be required in the future.
The Settlement Might Be Part of a Divorce Settlement
In other cases, funds from an injury settlement will be included as part of the divorce settlement itself. This is based on the fact that the money may be seen as joint property that should be divided equitably. However, it may be beneficial to have payments classified as alimony because this might help to lower your taxes.
How Is the Settlement Structured?
Payments made to you to cover medical bills or legal fees generally aren’t eligible to be split after a divorce. Additionally, they are unlikely to be included when determining how much spousal support you may be required to pay after a divorce. Money that is earmarked for paying living expenses or meeting your basic needs is also unlikely to be taken from you. If you receive money for lost wages or lost future earnings, some or all of that money might be considered exempt for spousal support purposes.
Does Your Former Spouse Need Money?
Spousal support is generally granted to those who need help paying bills or help supporting children immediately after a divorce. However, if an individual has a degree or recent work experience, it might be possible for that person to provide for him or herself. If an individual has savings or other sources of income, that too may reduce the need for spousal support. In fact, it may eliminate the need to make support payments at all.
If you have been hurt, you may be entitled to compensation for your injuries. If you’ve received a settlement in the past and are planning on getting divorced, it is a good idea to talk with an attorney, like a divorce lawyer Phoenix AZ relies on, about this concern specifically. Legal counsel may be able to help you understand your rights as it pertains to your personal injury case as well as how an award may be allocated in a divorce.
Thanks to our friends and contributors from Hildebrand Law for their insight into divorce and family law practice.