Are Your Assets in Danger if Your Spouse Gets Into a Car Accident During Your Divorce?

Different Ways a Car Accident Can Impact Your Marriage

However, first, we’ll explore the reasons a car accident can lead to divorce or strain your relationship further if you’re on the brink of a divorce.

1. Health Problems

A car crash can lead to incapacitating injuries, which would require an ambulance for transportation and a hospital for treatment. Such injuries include:

• Unconsciousness
• Major fractures
• Brain injuries
• Severe burns and lacerations
• Paralysis

While it doesn’t necessarily lead to permanent disability, your spouse will require a hospital stay for their extended recovery.

Of course, not all accidents have to lead to major injuries. They may experience minor injuries such as:

• Bruises
• Minor lacerations and burns
• Minor fractures

Others may experience suspected injuries, which do not include visible injury, but still come with pain complaints because of sprains, strains, dizziness, and headaches.

Health problems after an accident are likely to stress out your spouse and you because of worry over their well-being and health. Even for the spouse not involved in the accident, this stress can lead to health problems for them, such as elevated heart rate, difficulty sleeping, or high blood pressure. Becoming the main caretaker can also lead to brewing resentment, and your partner can feel like a burden. Ultimately, if you’re unable to resolve this resentment, stress can lead to a divorce.

2. Financial Problems

Financial reasons are often the number one reason for divorce, and your financial problems only increase after a car accident.

Medical treatment is expensive, and the medical bills after a car accident will pile up. Insurance often doesn’t cover all the medical expenses, and coverage limits can kick in. Additionally, you will need to pay to repair or replace the vehicle.

Suppose your spouse gets blamed for the accident, they can get sued for damages, including:

• Medical expense
• Property losses
• Suffering and pain from injuries
• Damages for fatalities
• Wage loss from injuries

Suppose your liability insurance policy fails to cover all these losses. In that case, other accident victims can levy your bank accounts, garnish your wages, and even have the sheriff’s office seize your property to auction it.

If your spouse is heavily injured and can no longer work or care for their basic needs, then the entire financial burden will be placed on you, which can stress your marriage further.

3. Emotional Consequences

There are also emotional injuries that result from a car accident. A permanent or temporary disability can cause your spouse to feel depressed and become withdrawn.

It can also lead to anxiety or PTSD as the brain recalibrates itself to protect itself from future accidents, making your partner feel hypersensitive. It can also lead to symptoms such as

• Emotional outbursts
• Panic attacks
• Paranoia
• Being detached from friends and family
• Flashbacks and nightmares

Some individuals may turn to alcohol or drugs to treat their symptoms and become violent or argumentative, which can either lead to divorce or, if you’re in the middle of a divorce, complicate the process as they can become uncooperative.

Separate vs. Marital Assets

Car accident settlement payouts can vary depending on asset types. Marital assets, also known as community property, refer to assets or property you acquire during your marriage. It can include wages, bank accounts, vehicles, retirement benefits, real estate, and more. They are both parties’ responsibility and are subject to division in the event of a divorce. On the other hand, separate property covers assets you acquired before or during your marriage, such as Inheritance, Individual gifts, and those kept separate via a premarital agreement. It is not subject to division as your spouse has no legal right to it.

Your separate property will not be at risk for collection or attachment if your spouse gets into an accident. However, being at fault for the accident can put your property at stake. You can also be liable if you have a joint title to the vehicle driven during the accident. The community property can be seized or liquidated to cover the victim’s compensation.

The Role of State Law

It’s important to note that your asset division during a divorce settlement will vary according to state law. States that follow equitable distribution will split assets according to what is fairer, whereas States, such as Nevada, that practice the community property principle will equally divide assets (obtained during marriage) between spouses. This affects the allocation of car accident settlements during the divorce process.

How to Protect Your Property if Your Spouse Gets Into an Accident

Let’s explore how you can protect your property in the event your spouse gets into a car accident.

1. Convert Marital Property into Separate Property

It is possible to convert your marital property into a separate property and vice versa, given your spouse consents to this move. You do this by executing a private contract to revoke your spouse’s ownership of specific assets. As separate property belongs entirely to you, it can’t be claimed to pay off the other party’s debt.

You can also create a postnuptial or prenuptial agreement specifying property classification during marriage. Another option is to set up an asset protection trust which prevents exposure to claimants and creditors against you.

2. Separate Financial Accounts

Consider having your income and paychecks deposited directly into your bank account. Not having your spouse’s name on the account will make it challenging to seize your money. This makes for a solid argument; you wanted your assets to be separate.

Navigating marital property division during a car accident can be complicated, so you should work with experienced car accident attorneys to guide you and negotiate the best settlement on your behalf.

Endnote

Divorce is already an emotionally charged journey, and accident settlements added to the mix only make it more challenging. It can extend beyond money and is heavily intertwined with memories of loss, trauma, and pain, which can significantly influence your ability to make logical decisions. Seek emotional support during this trying time, find methods to effectively handle stress, and establish compassionate and clear communication with friends, family, and your lawyers