How Does a Pending Lawsuit Affect Equitable Distribution in a Divorce?
Is it yours, mine, or does it belong to the both of us? Equitable distribution in a divorce is already difficult, but pending lawsuits only complicate matters further. How do they affect it? First, it’s worth considering how equitable distribution works.
How Does Equitable Distribution Work?
Equitable distribution is a term used to describe the division of property and debts in the context of a legal separation or a divorce.
If you’re due to win money from a pending personal injury lawsuit, for example, an Arizona Family Law court will consider all or a part of the award in its equitable distribution of assets, depending on what the
Are Your Lawsuit Damages Separate or Marital Property?
During equitable distribution, property ownership is split into two classifications:
- Separate property: This is property that is solely owned by you, such as gifts you’ve received for a birthday or inheritance from a family member.
- Community property: This is property owned by both you and your spouse, such as a car you’ve bought together during your marriage.
Arizona dissects a personal injury award to determine which sections belong to whom. Generally, if the funds are being awarded to replace community property expenses paid or loss of income, those award funds will generally be considered community property. For example, if your personal injury involved medical bills, the portion of the award that replaces the cost spent on those bills will be considered community property.
The part of the money compensating the injured party for pain and suffering, however, is counted as separate property. If ownership of certain property – such as lawsuit awards – is proving difficult, consult the services of a professional divorce attorney.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Equitable Distribution in a Divorce, or other family law issues, please feel free to contact 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.