Five Ways to Keep Your Personal Injury Money Safe in Divorce

In Utah, the general rule is that personal injury awards are separate (i.e., non-marital) property. That means you get to keep 100% in the divorce, instead of splitting it with your spouse.

The reason for this is pretty simple: your spouse didn’t contribute to your injury (hopefully), so he or she isn’t entitled to the money you get for your injury.

And while that general rule is pretty clear, you can mess it up and turn your personal injury money from separate to marital property pretty easily.

Here are the top five ways to keep that from happening.

1. Make sure you’re the only one on your personal injury award check.

Do not let your personal injury attorney cut a check to you and your wife. Only to you.

2. Put your personal injury money in a separate account only you can access.

Yes, I know, this seems odd, what being married and all, but it’s really, really important. If you put this money in a joint account, the money becomes comingled. Then, when it comes time to divorce and you try to convince a judge that money is yours and yours alone, you’re going to be sorely disappointed.

(Note: most of the time I tell people to put personal injury awards in an investment account or a bank account in an institution completely different than any your spouse has ever used. Be safe.)

3. Don’t use the money on family stuff.

If you use your money on trips to Disneyland or family cars, there is an argument the money has become marital. Now, if you have the money in a separate account, the money still in the account will probably stay non-marital, but, again, why take the chance?

4. If you buy stuff with your personal injury award, make sure you’re the only one on the title.

Names on titles doesn’t usually mean much in Utah divorces. The one serious exception is when something is purchased with non-marital money and the spouse is not on the title. So, if you buy a rental property with your money, don’t put your spouse on the title or mortgage, and keep the rental income segregated (segregate everything), then it’s very unlikely a judge will see that rental property as martial property.

5. Hire a good divorce attorney.

I’ve seen cases involving personal injury money that should never have been shared in the divorce. The reason it was shared: the attorney didn’t know any better and let the client cave when the spouse got aggressive and said he or she would come after the award. A knowledgeable attorney will know how to handle that situation.