How Is a Personal Injury Settlement Handled in Divorce?
I was recently asked this question and it’s an extraordinarily good one, certainly worthwhile to address in this blog. Different states, of course, handle personal injury settlements in divorces differently. Massachusetts is an “equitable division” state, meaning that property division is handled fairly. But the first question is what is marital property? More specifically, is a personal injury settlement “marital property”? And the answer is yes, at least in Massachusetts.
In Massachusetts, all property is marital property, meaning that all property is available for division. That property then gets divided fairly. In deciding what’s fair, a judge has to take into account 17 different factors that range from how old each of the parties is and how long the marriage lasted to what each party contributed to the marriage financially and in every other way. What each party contributed is particularly important, especially in shorter term marriages
Although personal injury settlements are marital property in Massachusetts, it does not necessarily follow that such settlements are divided equally, even when all other property is divided equally. The fact is that personal injury settlements compensate many types of damage, some of which have nothing to do with the marriage. In particular, to the extent that a settlement includes compensation for future lost wages, the other spouse can have little claim to such, post divorce, types of income. Moreover, pain and suffering is often the largest element being compensated and to the extent that it compensates for post divorce pain and suffering, that amount would have little to do with the marriage. On the other hand, to the extent that a settlement replaces income lost or medical expenses during the marriage, the other spouse would certainly have a much greater claim to a portion of that amount.
In dividing marital property, judges have a wide discretion. That judges should take into account what elements of personal injury damages the settlement compensates, does not limit judges in how such settlements are divided. If one spouse should receive a certain amount, but there is nothing other than the personal injury settlement to fund that amount, then the settlement will be used to the extent necessary to balance the scales.
MARITAL ASSETS AND DEBTS; DIVORCE IN MASSACHUSETTS
MARITAL ASSETS, MARITAL DEBTS AND DIVORCE IN MASSACHUSETTS
Marital assets are the things of value acquired during the course of a marriage. Included are such things as bank accounts, real estate, retirement pensions including IRA’s, 401k’s, 403b”s, Keough, SEP plans. Inheritances received during the course of a marriage are marital assets. Jewelry and furniture, art work, pleasure boats, vacation homes and trust funds are all marital assets.
Anything of value owned by a married couple, regardless of in whose name title is held, is a marital asset. However, all marital assets are not necessarily divided. An asset that one of the parties owns prior to the marriage may be excluded from those assets deemed divisible. How the parties used the asset is primarily the determining factor. For example, if one of the parties owned a rental property prior to the marriage and kept all income from the property separate from other marital assets and used none of the income for any marital purpose, that asset could be excluded from division.
Marital debts often are much easier to identify and hopefully, less than the assets. Of course a mortgage on the marital home, the vacation home and credit card debt are obvious. Yet, such things as unpaid orthodontist bills for children, and loans for children’s college education are marital debt as well.
As with assets, some debts may be excluded from division. A party’s education loans accrued prior to the marriage could be assigned to that party and be excluded from other divisible marital debt.
You ask “why is this important?” For divorce, Massachusetts is an equitable division state. Equitable means fair, not necessarily equal. Hiring a Massachusetts family law and divorce attorney may facilitate identifying those marital debts and assets that are included in the divisible pot and those that may be excluded.
Gene R. Charny, Esq.
Child Support; How is it Paid?
CHILD SUPPORT: HOW IS IT PAID?
Child support is paid by the non- custodial parent. This is true for both divorce and paternity matters. Often, child support, either looking to get it or to reduce it, is the underlying reason for custody battles.
Most often child support is paid weekly, but that’s only because most people get paid weekly. If the parent paying support gets paid bi-weekly or monthly then, of course, child support would probably be paid according to that schedule. The issue is really one of convenience. A person who gets paid monthly could certainly arrange to pay support weekly and vice versa. The important part here is that there be a specific day that it is paid so that the recipient can rely on receiving it a specific day, much like a worker relies on receiving a pay check on a specific day.
How do I actually receive the support money is the most common question. There are two basic ways: 1) from the Department of Revenue, or 2) directly from the other parent.
Generally, all child support orders are done by a wage assignment. The child support is taken directly from the paying parent’s pay and sent to the DOR. The DOR then loads the amount kasino onto a debit card held by the receiving parent. The DOR no longer sends out checks.
Occasionally the parents decide that they would rather not have the payments go to the DOR by wage assignment. Instead, they prefer to have the child support go directly from one parent to the other. It is then up to the parties to request the judge suspend the wage assignment. Yes, if you change your mind you can always request the judge reinstate the wage assignment if support isn’t being paid.
If the paying parent is self-employed or does not receive a regular paycheck, the support is paid either directly to the DOR or directly to the recipient parent. Any wage assignment would be suspended.
Should the paying parent start receiving a regular paycheck the wage assignment may be re-instated.
Gene R. Charny, Esq.
Unmarried with Children, Establishment of Paternity
UNMARRIED WITH CHILDREN
ESTABLISHMENT OF PATERNITY
Nationally, statistics show that more and more children are born to parents who are not married. While there is no longer the stigma of being a child “born out of wedlock,” the rights and obligations of unwed parents differ from those of married or divorced parents.
Major differences are the establishment of paternity, custody and the associated rights to information about the child, support and parenting time. There is a presumption that the husband of a married woman is the father of her children. If a divorced woman gives birth within 300 days of her divorce, her former husband is presumed to be the father until proven otherwise.
For unmarried parents there is no such presumption. Even if the parents live together, a father must establish his paternity. Only after establishing paternity will an unmarried father secure his parental rights.
A Voluntary Acknowledgment of Paternity, (“VAP”), establishes paternity when the parents sign the VAP in the presence of a notary public, and the VAP is recorded in the appropriate municipal or state office. A VAP may be rescinded within sixty (60) days of the date of signing. A VAP may be challenged within one year only on the basis of fraud.
While the VAP establishes paternity, there is a presumption that the mother has
sole custody of the child. While the VAP establishes paternal rights it does not effectuate those rights. Only a Family Court can establish enforceable visitation schedules, child support orders and custody.
Alternatively, if no Voluntary Acknowledgment of Paternity is signed and recorded, a paternity action to establish paternity, as well as custody, support and visitation, may be commenced in the appropriate court, generally the Family Court.
Child Support – What is It?
CHILD SUPPORT – WHAT IS IT?
Parents have a legal duty to provide shelter, food and clothing for their children. This is true regardless whether the parents are married, divorced, or were never married to one another.
When the family unit is intact, child care and providing life’s necessities is taken for granted. No one thinks about paying “child support.”
But what happens when the family unit breaks down? Usually, the children reside with one of the parents, who is called the “custodial parent.” The non-custodial parent’s contribution to providing shelter, food and clothing for the children is called child support.
A common complaint is “If I am paying child support, why do I have to give my ex-wife, or ex-girlfriend my money and not give it to the kids?” Well, no child is able to manage their own money. The candy store would look like a great place to spend it.
Another complaint is “Why do I have to pay child support to my ex, he has a good job and has all the money he needs?” Children of a non-intact family should be provided for to the same extent as they would had the family unit not broken down. They should have the same advantages that they had when both parents’ incomes were used in combination to provide support for the family unit.
“Can I get an accounting of how my ex spent my child support money?” The short answer is NO. Judges will not entertain any request for an accounting of how child support money is spent.
Gene R. Charny, Esq.
Paternity Lawyers in Boston, MA
You are having a baby! You are proud parents to-be. But you are not married. There are significant differences between being married and having a baby and not being married and having a baby. Those differences have serious legal ramifications.
The two of you are living together and things are fine, for a while. Legal issues are the furthest thing from your minds. Suddenly your relationship starts to deteriorate and soon you separate. Continue reading
CAR ACCIDENTS
Let’s face it, we are addicted to our cars. No matter how dangerous cars are, we hop into them without a second thought and drive down the street, not giving a second thought to the risks. Nationally, about 1 million car accidents every year result in 3 million people being hurt. Two million of these injuries wind up being permanent.
We have a legal right to rely on other drivers complying with the laws of the road and we rely on that right, without considering for a moment the possibility that not all drivers obey all laws at all times. The end result is the old saying that “if you drive enough miles, you’re going to have an accident.”
What do you do when the old saying comes around to you and you’re involved in a car accident? Here’s a tip that you might keep in mind. One of the first things to do, if possible, is to take pictures of the car accident, or ask somebody to do that. Most cell phones can take photographs. Let me tell you a story. I had a client who, for a full year, gave me one version of how his car accident happened. At his deposition, the other driver produced pictures of the accident that made it very clear that the accident happened very differently. If I had those pictures at the start of the case, the claim would’ve been handled very differently.
Aside from taking pictures, the first thing you should take care of, obviously, is to get the medical attention you need, if any part of you is in pain. When you get to the hospital, be thorough in telling the doctors about your injuries, but do not exaggerate. Doctors and nurses know exaggeration when they see it, and exaggeration only minimizes your real injuries. A personal injury claim depends heavily on the medical records; a note in those records that the patient is exaggerating does not help the claim. On the other hand, some types of injuries, often very serious, start off slowly. Sometimes, for example, a small pain in the neck can become extraordinarily painful. The next morning. So, don’t feel reluctant about talking with an attorney simply because you weren’t carted off to the hospital right after the accident.
DETERMINING CHILD SUPPORT AMOUNT
CHILD SUPPORT – HOW IS IT DETERMINED?
Child support is calculated the same way whether the parents are, divorced, or were never married. The amount of child support to be paid is based upon the parents’ incomes. The Child Support Guidelines work sheet is used to calculate child support for parents earning a combined gross income up to $250,000.
You wonder what happens if the parents combined income is over $250,000? The award calculated at the $250,000 level is considered the minimum amount of child support. The court has discretion to increase that amount.
Is there just one amount regardless of how many children there are? No. The base amount is adjusted incrementally up to 5 children. There is no adjustment for more than 5 children.
Other questions include whether credit is given for paying child care or health insurance. The answer is, yes. Those amounts are deducted from the gross income of the parent who pays the child care or health insurance.
Another concern is what happens if the non-custodial parent has little or no income? The Guidelines are intended to protect a minimum standard for parents ordered to pay child support who earn $100 or less per week. But because all parents have an obligation to support their children, a minimum order of $80 per month, ($18.46 per week) most likely would be ordered.
Next: How is Child Support Paid
Gene R. Charny, Esq.
HOW MUCH IS MY CASE WORTH?
I get asked that question from time to time. Some clients have no idea, some have unrealistic expectations. My answer is always the same: “It’s worth every last cent I can get for you.” I’m not being flippant; this is quite true, even though it says nothing about the value of the case.
So how does the value of a personal injury case get determined? The first thing to understand is that no two cases are identical. For example, what’s the value of the loss of the small finger on a non-dominant hand? If the person who lost the finger rarely used it for work or play, the value is one thing; if the person is a concert pianist, the value is quite another thing.
The value of a claim does not depend on how the injury occurred. Whether the injury was suffered in a car accident, a construction site accident, because of a defective product or in any other way, personal injury damages all have some or all of the same elements and all are entitled to e compensated fairly.
Personal injury claims are ultimately measured by one yardstick – what a jury verdict would likely be. It’s most often possible to estimate with some accuracy what the range of a jury verdict will be; a verdict is not likely to be less than $___, nor more than $___. So, the settlement negotiations usually take place within those parameters.
Estimates of likely jury verdicts are based on verdicts in the most similar cases and by taking into account the several ways a personal injury can cause damage. A successful plaintiff is entitled to be compensated for each of those ways. The different aspects of damage can be divided into economic damages and general damages.
Economic damages are easy to calculate; they are in essence out of pocket expenses. How much were the medical expenses, for example. If the reasonable medical expenses were $1,000, then the plaintiff is entitled to have that amount included in the verdict in addition to compensation for other damages.
General damages include pain and suffering, loss of function, impairment of earning capacity (not always the same as lost wages), deformity (such as scarring), mental anguish and perhaps loss of consortium. They are not capable of precise valuation. They are very fact dependent. They depend on what a jury decides is fair and reasonable for the loss in the circumstances.
What is fair compensation for pain and suffering? The answer, of course, is that it depends. It depends on how serious it is and how constant it is. A constant, severe, every moment, everyday pain that demands full attention and leaves a person unable to function is likely to be compensated much more than an occasional twinge.
INSURANCE BAD FAITH LITIGATION – ENFORCEMENT
An earlier blog listed the acts or practices that violate the Unfair Claims Settlement Practices Act that has been enacted in every state. But not every state enforces the law in the same way. Some states allow only their department of insurance to enforce the law. People in those states who have been treated unfairly by insurance companies handling their claims can only file a complaint with the department of insurance and hope the department does something about it. Other states, like Massachusetts, allow claims to be made in court directly against the insurance company.
The Massachusetts law does not specifically say that someone who has been treated unfairly can bring a claim directly against the insurance company. But Massachusetts has a consumer protection law, Massachusetts General Laws chapter 93A. Section 9 of the Consumer Protection Act specifies that a violation of the Unfair Claims Settlement Practices Act also violates the Consumer Protection Act (“93A” hereinafter).
93A sets out a very powerful enforcement mechanism. For consumers (as opposed to businesses), the first step is to make a “written demand for relief.” This demand letter should be written with care. To be valid, it must contain certain elements. It must identify the claimant and describe the unfair or deceptive acts or practices committed. It must reasonably identify all injuries suffered. And the demand must notify the recipient that a demand under chapter 93A is being made.
For example. You’ve been hurt in an automobile accident which was someone else’s fault. You spent some time in a hospital and your medical bills are enormous are beyond what PIP and your medical insurance will pay. You weren’t able to go back to work for longer than you can afford and you don’t have enough money to pay the bills. Worst of all, some part or parts of you are broken. You don’t know if you’ll ever heal completely, if you’ll ever be the person you were before the accident. You are, in short, behind the eight ball.
A claim is made against the other driver’s insurance company. Maybe you’re farsighted enough to have underinsurance coverage. If you do and the other driver doesn’t have enough insurance to cover your claim, then a claim is also made against your insurance company for the underinsurance benefits you have under your own automobile insurance. After waiting many months and having gone through an insurance medical exam (“IME”) by a doctor selected and paid by the insurance company, the other driver’s insurance company offers a fraction of the fair value of your claim, an amount too small even to pay your medical bills. Here’s where the written demand for relief comes in.
Upon receipt of a 93A demand letter, the respondent is allowed up to 30 days to make a “reasonable offer of settlement.” It’s important to identify the injuries suffered thoroughly. 93A requires that the settlement offer be reasonable in relationship to the injuries demonstrated.
The purpose of the 93A demand letter is to encourage the reasonable settlement of claims and avoid litigation. If the respondent does not take advantage of its 30 days to make a “reasonable offer of settlement,” then the court can award an additional 2 or 3 times the amount of the judgment if the respondent was acting knowingly and willfully, as well as attorney fees.
A real life story. Janet’s car was sideswiped while it was parked in the garage where she worked. The cost to repair the damage was $6,000. She never found out who did it, so she made a claim against her own insurance company. Her insurance company, for some reason, just didn’t believe her and would not pay. She came to this office for help. Frankly, the size of the case was not the kind that we normally would take, but Janet was very impressive; she was a hard working mother of 3 who was done wrong by her own insurance company. The insurance company wouldn’t budge, even in response to the 93A demand. So we filed suit and went to trial. In the end, we recovered $55,000 in a claim that the insurance company could settled for $4,000.