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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1 (permalink)  
Old 11-19-2012, 11:57 AM
Join Date: Nov 2012
Posts: 59
acpickering is on a distinguished road
Default Personal Injury Settlement

I found this definition and had a question regarding "Personal Injury Awards":

"Net Family Property - In Ontario family law, the first step in determining the division of assets is calculating your net family property. This is essentially your assets on the date of separation, less your liabilities on the date of separation, less your net worth on the date of marriage, and less any inheritances, gifts from third parties and personal injury awards received during your marriage that are traceable."

I had an accident during my marriage. We are separated now... hopefully divorced finalized next year. I receive disability income replacement from my insurance company along with CPP disability.

It's been 4.5 years already, but I'm hoping I may settle within the next 3-6 months. There is no tort claim or pain and suffering, etc. I will receive an income replacement (loss of income) and my future care costs (therapies/meds/etc). As I can no longer work, this money would be for me to survive the rest of my life.

I don't know what the numbers will be yet, but just for example, lets say... I will have an option to either receive a lump sum ($1M) or a structured settlement to maintain my monthly income forevermore.

Because this accident occured during marriage, would my ex be entitled to my settlement?

Or because this is my future care costs (for needed therapies,etc) and income replacement (since I can no longer work) would she not?

If I recieve a lump sum, I would need that money to invest/gic or something to ensure I maintain an income to survive.

Does it matter if I choose a lump sum or structured settlement?

My thought is that a lump sum would be a payout (less because of settlement) but based on what I am receiving now. If I end up being ordered to pay support based on my income now, I would think I would simply maintain that.. and she would not get a part of the settlement. A lump sum would hopefully allow me to live off the interest but always keep the principle amount for my kids' future. Otherwise I could do a structure settlement which would guarantee me a basic income, but never holding on to the principle amount.

My main worry is that a lump sum payout would get counted as an asset during marriage, which would give her half...
  #2 (permalink)  
Old 11-19-2012, 12:12 PM
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Mess is a jewel in the roughMess is a jewel in the roughMess is a jewel in the roughMess is a jewel in the rough

Ontario Family Law Act
(2) The value of the following property that a spouse owns on the valuation date does not form part of the spouse’s net family property:
1. Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage.
2. Income from property referred to in paragraph 1, if the donor or testator has expressly stated that it is to be excluded from the spouse’s net family property.
3. Damages or a right to damages for personal injuries, nervous shock, mental distress or loss of guidance, care and companionship, or the part of a settlement that represents those damages.
4. Proceeds or a right to proceeds of a policy of life insurance, as defined under the Insurance Act, that are payable on the death of the life insured.
5. Property, other than a matrimonial home, into which property referred to in paragraphs 1 to 4 can be traced.
6. Property that the spouses have agreed by a domestic contract is not to be included in the spouse’s net family property.
7. Unadjusted pensionable earnings under the Canada Pension Plan. R.S.O. 1990, c. F.3, s. 4 (2); 2004, c. 31, Sched. 38, s. 2 (1); 2009, c. 11, s. 22 (5).
You want to notice point number 3 regarding damages. You are interested in the income replacement portion.

Here is an analysis from the law firm Thomson Rogers:
With respect to the damages related to income loss, the court concluded that monies received for past income loss should be included as net family property; however, monies received for the loss of future income after the date of separation should be excluded. The reasoning was that income earned following separation would not have been shared as of right, and therefore, the portion of the settlement paid to replace that lost income should not be shared. The court has taken the view that "damages received as a replacement of post valuation date wages are personal to the injured person, and should be excluded from net family property."9
So it would appear that any damages you receive for injuries, shock, etc. will be excluded. What you receive as replacement for lost income during the marriage will be included. What you receive for lost income after separation will be excluded.

If you take a lump sum, you would need to calculate the total amount of expected lost income (your insurance has surely done that.) Look at the proportionate time periods, the period during the marriage and what would have been considered your lost income going forward after separation. Then split your lump sum payment proportionately.

Then treat the payment you received for the period during the marriage as income that you "banked" while your spouse covered all other expenses.
  #3 (permalink)  
Old 11-19-2012, 12:29 PM
Join Date: Nov 2012
Posts: 59
acpickering is on a distinguished road

My ex was not working, and therefore we have been living off my disability income since 2008. Any past income loss, etc. has already been paid... and we've been living off of it.

I am now being asked if I would like to settle or continue to receive my benefits now.

If I do settle, they do not consider anything from the past.
It would simply be all benefits I am entitled to from the date of settlement to age 65.... minus their discount for settling and my lawyer's 20%.
Therefore everything would be considered "future".

Based on what you've said, therefore it doesn't matter if I choose a structured settlement or lump sum... basically this is for my future income and she is not entitled to it.

So I shouldn't fear any part of it counting as an "asset" that she could come after?

I'm not trying to hide it from her, but after settling I will have no income. I'm hoping to keep it all so I can invest properly and receive some sort of income to live. She has the option to work, but if she chooses not to... this will hopefully still give me some sort of income so I can offer her support... or the opposit, so she can start working I won't have to ask her for support.
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Old 11-19-2012, 12:30 PM
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Mess is a jewel in the roughMess is a jewel in the roughMess is a jewel in the roughMess is a jewel in the rough

You should verify what I have told you with a lawyer, but you have the gist of it right.
  #5 (permalink)  
Old 11-19-2012, 12:46 PM
Join Date: Nov 2012
Posts: 59
acpickering is on a distinguished road

Does the same apply to property?

The insurance company is set to modify the matrimonial home to make it wheelchair accessible. They approved it in a Phase 1($75k) and Phase 2($265k) process. Phase 1 was complete during marriage.

Then we separated and I've always maintained the matrimonial home was she got a different home.

Now the insurance won't start Phase 2 until they know for sure I will be able to keep the home. I am in the process of finding out her equity share in the home to buy her out. I'm told the insurance will use some of the budget to buy her out, and then finish the home...

My other option is to allow the matrimonial home to be sold, and split the equity. I really don't want to do this as they have already invested in modifying it for me... it's next door to my kids' school which allows me to easily go in my wheelchair... and my mum's house is 2 minutes away, so she can always help me out when needed.

With this option, I would then have to move to a Condo. The insurance company would buy it for me (approx. $200k) and then use the rest to modify it for me. This would force me to move further away from the kids' school, family, etc..

However, since the condo would be paid out for me... to accomidate my injuries... the insurance company is scared that this would be counted as an "asset" during marriage, and my ex could still force me to sell or take half the equity...

Therefore, basically I'm just stuck right now with the insurance company not wanting to do either option.

It would be nice to be mortgage free in a condo, but I would still have to pay maintainence fees which goes up each year and could be close to my mortgage payment now. Plus I would be further away, most likely in an older building (so that there's more space) and I wouldn't be able to easily get to my kids' school.

Would this be counted the same as part of my injury settlement?

If so, then if I got a condo, she would only have access to the equity in the matrimonial home and nothing towards my condo? And if I stayed in the matrimonial home and finished modifying it before the divorce is settled... she would only be entitled to the equity of the home at the time of separation, and not entitled to any extra equity the modifications would bring to the home?
  #6 (permalink)  
Old 11-19-2012, 10:57 PM
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ddol1 is on a distinguished road

You need to read the section 4 in the Family Law Act, slowly and carefully. What you want to know is there. The biggest issue for you is just like spousal support in that you need to show entitlement to ss before an amount would be calculated for the monthly payment. Here you need to make sure and then some that you can show your injury in the light that falls within the excluded range. Maybe better said, exclusion is not black and white always and having the decision that your claim is definately due to an accident and there is a need to ensure the various heads of damages are defined.

As you know income before the seperation is shareable, real damages that were for pain and suffering, replacement of personal items damaged and there can also be amounts paid to compensate you for your loss or inability to work under your old occupation - training costs to educate yourself in a new capacity to allow yourself to return to work in some capacity.

Most important, and if you can see past the statement of you are lucky to be in the position you are to not have recieved your bulk of benefits until after seperation. This definately allows you to easily track the funds, they have not been intermingled or any other dozen "complications". For you, your divorce is going to be based on your family net properties on the date of seperation. Any benefit that you recieve after the fact is all yours..... except:

Should your benefit be for a loss that they could argue is a shareable benefit say they use the "entire benefit, or part of one" as being known, as being a fully payable benefit that an amount is known..... I have read cases where the method used, or the thinking used is that your disability iis more like a retiremnet pension than a disability pension. You must do everything you can to show that your 1M, what sounded like a past 65 years old plan, is not taken as a up to and past age 65 plan. The cases that this fell under the most was the work related insurance plan for disability that the courts then ruled that the company injury settlement was in effect a retirement settlement as it did carry payments past a temp injury settlement all the way to allowing the ruling that the insurance settlement was more akin to a retirement plan than an ongoing injury replacement plan with the possability, even a remote one, of returning to work one day. Wording will be everything in your settlement - make sure it is reviewed and understood by the lawyer that you seek advice - a cheap insurance to best ensure you do keep the maximum you can.

hard time typing today, hope the above did make sense for you.....
  #7 (permalink)  
Old 11-20-2012, 01:21 AM
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Mess is a jewel in the roughMess is a jewel in the roughMess is a jewel in the roughMess is a jewel in the rough

Originally Posted by acpickering View Post
Does the same apply to property? ... etc. etc.
Seriously, like hell anyone on this forum can answer those questions, including the occasional lawyer that posts here.

The insurance company needs confirmation that you will have legal possession of the home and be able to keep the title in order to the work. Duh. What is your task? Get exclusive possession. And pay your bloody property taxes.

The ex should be settling with you on the basis of these issues. It doesn't help her if you can't keep the home and it doesn't help the child. If she is not willing to settle then she is being hostile and adversarial. That is all the information that you need to bring to court, that the ex is not co-operating with you being able to settle with the insurance company in order keep your stable residence and provide a home for your children.

Take the steps. Do you need my permission? I'm giving it.

Honestly, you are coming across as terrified to cross your ex and scared to do anything but support her. You are writing as though you have been trained like a circus animal to perform the way she wants. You have specific things you need to do to deal with YOUR needs and YOUR life. Get on with it. If the ex stands in your way, the courts will get her the hell out.

There is a point where you have to look in the mirror and realize that your ex has demands and expectations because you have been training her to have them. You need to stop. Stop thinking about your ex and take the steps you need in order to arrange your life the way it needs to be going forward.

You are caring for your children 50% of the time. You are already fulfilling any and every obligation you have. You don't owe your ex anything now. She is able bodied and has university degrees; you are disabled. Cut the strings. You are being dependant on her for your self-esteem, by the way you are approaching this. She has nothing to do with you, the relationship is over.
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