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  • Personal injury settlement.

    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?

  • #2
    Originally posted by thisisunreal View Post
    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?
    Nope, 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.

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    • #3
      Originally posted by FB_ View Post
      Nope, 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.
      Could be the case. But, the equalization is as of the date of separation so there may be an argument that the money came in after the date of separation. This is a really complex one to deal with.

      Orleanslawyer to the rescue...

      Good Luck!
      Tayken

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      • #4
        Did the money come in after separation?

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        • #5
          The money has been mingled and is now a marital asset. Technically, you dont 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, its not a given, but ethically, its 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 its 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, Id fight for it.

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          • #6
            Well said Rioe

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            • #7
              personal injury funds.

              No money was before separation. Doctors told me I probably won't be able to work after the next 10 years. It was a large amount.

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              • #8
                I received a settlement for car accident.
                Is the settlement due to personal injury or to replace lost income?

                With that I paid off our mortgage.
                Uh oh.

                When we divide up assets, will I get that back?
                It depends on a number of factors, including:
                - 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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                • #9
                  Originally posted by OrleansLawyer View Post
                  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.
                  Past income loss would be treated as regular income as the ex should have benefited from it while together.

                  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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                  • #10
                    personal injury

                    thanks for your replies. The settlement was for future because i was told i'd only be able to work another 10 yrs. I did thiis to make life for my family easier . Since then there's no talking to her and she's turned my kid's against me. It's always been her way or else.

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