Going though divorce and 3 yrs ago I received a settlement for car accident. With that I paid off our mortgage. When we divide up assets, will I get that back?
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Originally posted by thisisunreal View PostGoing though divorce and 3 yrs ago I received a settlement for car accident. With that I paid off our mortgage. When we divide up assets, will I get that back?
You mingled it with joint money. In order for it to remain yours it must be kept separate from all other funds. You basically spent it.
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Originally posted by FB_ View PostNope, I don't believe so.
You mingled it with joint money. In order for it to remain yours it must be kept separate from all other funds. You basically spent it.
Orleanslawyer to the rescue...
Good Luck!
Tayken
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The money has been mingled and is now a marital asset. Technically, you don’t get it back. However, there is always room for negotiation.
The settlement was received in compensation for future expenses related to an injury. Presumably there was family discussion at the time about what to do with it, and the decision was made to pay off the mortgage with the agreement that saving money then was more important than preparing for the injury-related expenses in the future. There was probably an assumption that her future income would help with those expenses?
I would suggest that you offer her the choice of taking less equalization from the home equity by reducing it by the amount of the settlement, or paying indefinite spousal support to you, and see what her response is. Legally, it’s not a given, but ethically, it’s very fair. It all depends on the eloquence of your lawyers, the judge, the reasonableness of your ex, the amount of money involved, and how much money you may be required to spend. Come armed with all the documentation around the injury and settlement, and estimates of the expenses in the future due to the injury. Ask your lawyer what he feels your chances are and decide if it’s worth pursuing.
If it was a $10k compensation to avoid a lawsuit for the injury, drop it. If it was $250k meant to help support you for the rest of your life because you can no longer work, I’d fight for it.
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I received a settlement for car accident.
With that I paid off our mortgage.
When we divide up assets, will I get that back?
- Why did you get the money?
If it is replacing income lost while you are off work - then it is treated as the same as income, in which case would have been split anyways. If part of the income goes forwards after separation, things become more complex.
If it was for damages (say, loss of quality of life following loss of the use of your legs), the money is normally excluded from equalization if it can be traced.
Can it be traced?
Absolutely - into the jointly held matrimonial home. This is a problem.
What can be done?
1 - Talk to your ex. She may agree that it is fair for you to receive the money back in negotiations.
2 - Constructive trust, on grounds of unjust enrichment, coupled with unequal division of net family property.
What does #2 mean?
She landed a windfall of money which she did not do anything to earn, and otherwise would not have received but for your election to mingle it with the debt associated with the home.
The main reason to argue #2, however, is to give yourself leverage to make a settlement if #1 doesn't pan out. This is because:
- The long and expensive process to go to trial will likely cost more than you gain; and
- CanLII - 2003 CanLII 2064 (ON SC) at pp. 19-36.
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Originally posted by OrleansLawyer View PostIf it is replacing income lost while you are off work - then it is treated as the same as income, in which case would have been split anyways. If part of the income goes forwards after separation, things become more complex.
Shouldn't future income loss be excluded as your ex would have never benefitted from it after separating? Since it's a larger settlement, if cs/ss are involved, then I guess you would have to invest it and interest count as income??
I'm assuming future care costs would be excluded as well, as it has a specific purpose related to your specific injuries.
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