Why Personal Injury Victims Also Need A Family Law Lawyer
This is the Ontario Family Law Podcast, featuring issues related to marriage, separation, divorce, child custody, support, property and even some child welfare issues. It is a companion to the book The Guide to the Basics of Ontario Family Law, which is available on Amazon. My name is John Schuman. I am a certified specialist in family law, practicing as a lawyer, mediator and arbitrator and I am the partner managing the Family Law Group at Devry Smith Frank LLP in Toronto. Today on the podcast, why personal injury victims also need a family law lawyer.
People who suddenly find themselves serious injured have a very rough time. They can become very dependent on their personal injury lawyer to assist them with organizing care, and creating sources of money to look after the needs of the victim and the victim’s family. At that time, life can also seem overwhelming. The last thing a victim wants may be to speak to another professional. But, if you have been seriously injured, there are some very good reasons to speak to a family law lawyer to make sure you have what you need going forward.
Serious injuries (or illnesses) can cause a lot of change and stress in a family’s life. Sometimes the family becomes stronger. But often, the changes and the stress are just too much for spouses. Maybe it is that “he’s not the man I married anymore.” Or maybe, its “I can’t do the around the clock care.” Or maybe, it is just that things are too overwhelming, seem hopeless or are too difficult. It could be that families do not get enough emotional and psychological support after an injury. In any event, family lawyers see a lot of families that have broken down after a serious injury.
How Family Law Can Take Away a Personal Injury Settlement
Many victims just assume that they are protected from having their awards taken away in Family Court. After all, the award or settlement was based on what the victim actually needed. Victims also hear that property division under the Ontario Family Law Act is not supposed touch damages payments awarded for personal injury. However, that is not entirely the case, and there are thing that victims of personal injury need to know about family law.
Damages for personal injury are excluded from the property calculation on marriage breakdown. Common law couple cannot make Family Law Act claims to each other’s property in any event. However, there are parts of a personal injury settlement or award that do not fall under the Family Law definition of damages.
Under Family Law, Damages means payments for pain and suffering. It may also mean payments to cover care costs, or special equipment or renovations that are necessary as a result of a disability resulting from an injury.
Under Family Law, damages may not include the portion of a settlement that is intended to replace lost income. A disability pension is a pension that the Family Law Act considers property and must be divided. The right to receive future income under a contract may, but does not always, fall under the definition of property to be divided.
Where there has been a payment or payments to replace lost income, but that has not been considered property to be divided, it may be considered income for the purposes of spousal or child support. So, child or spousal support can be based on the income that the income replacement payment replaced. Depending on the circumstances, that can result in more than half of the income replacement payment being paid as payment.
There are a few more problems. The biggest is with matrimonial homes. I have done other podcasts that cover the financial problems that matrimonial homes can create. But, for disabled people, the problems can be devastating.
Why Personal Injury Victims Need a Family Law Lawyer too
Under the Family Law Act, unless the parties have a marriage contract to the contrary, the FULL VALUE of all matrimonial homes (spouses can have more than one such as a city home and a cottage), is included in the property division calculation. The “exclusions” do not apply to matrimonial homes. However, often injured people have to make significant modifications to their homes to live in them after a disabling injury. The house may need ramps, elevators, widened doors, lowered counters, special bathrooms, or other EXPENSIVE modifications. The cost of that special equipment would otherwise be excluded from the property calculation as damages. However, since those modifications are made to a matrimonial home, and the home is not excluded, neither are those modifications. The same principal applies if the injured person used the damages payment to pay down the mortgage on a matrimonial home. Their spouse gets the benefit of half of whatever the injured person paid down on the mortgage.
Even worse, if the home is the main asset, and it must be included in the calculation, the injured person may have to sell it to make the equalization payment – and may be left without enough money to buy a new home AND make the necessary modifications to it.
Another problem may be that the uninjured parents and the kids may get to stay in the modified home if the uninjured parent is successful in getting an order for exclusive possession of a matrimonial home. That could leave the injured parent without an appropriate place to live. Hiring a lawyer could be critical to making sure that the judge understands how necessary it is for a disable spouse to be in the home with the modifications.
Another mistake that an injured person may make is putting the damages payments into joint assets, such as a joint account. Once an “excluded asset,” such as a damages payment, has been “comingled” with a spouse’s asset, it is no longer excluded. Putting money into a joint account can make excellent sense for estate planning reasons, but when you separate the spouse that put that money in can lose half or more of it. It may be possible to still claim the exclusion for the damages payment if the injured spouse can “trace” where the money went through a joint asset – but that can be difficult (or impossible) and sometimes only some of the funds can be traced.
As I noted previously, being injured does not mean you do not have to pay child support or spousal support. The part of any award related to income replacement can be considered income for support. In addition, being disabled does not necessarily mean an injured person cannot work. Ontario Family Law (and Canadian Divorce Law) expects that support payers will work if they are able, and make as much as they can. If a judge believes the injured person can go to work and earn an income, or earn more, the judge will order support based on that higher income – even if the injured person is not making it.
If you are anticipating receiving a personal injury settlement, it would be a good idea to speak to a family law lawyer before the deal is completed. The family law lawyer can help you make plans, and offer advice on the settlement, to make sure that there is some predictability to what happens if there is a marriage or relationship breakdown.
How a Family Lawyer Can Help Personal Injury Victims Too
A good family lawyer can also advise you what to do with your settlement so you do not unintentionally give it to your spouse.
Also, although you cannot fix everything with a marriage contract, for example you cannot opt out of child support or set the custody terms, you can do a lot regarding spousal support and property. You can set out how your settlement will be divided on separation, or set out that it will not be. The injured spouse can make sure that he or she can stay in the home modified to accommodate any disabilities. You can specify how much spousal support will be paid between the parties – if any.
In short, you and your spouse can work out what would be a fair way to address the personal injury settlement proceeds in order to prevent hardship. Listen to my podcasts on marriage contracts and cohabitation agreements to hear what you have to do to have a valid and enforceable domestic contract.
On separation, spouse may no longer be friendly. Many times the uninjured spouse has gone after that special home, or support, or sought a big chunk of the settlement as property equalization then more for support. That can drain away the money that was intended to meet the needs of an unfortunately disabled person.
I have not discussed child custody and access issues in relation to personal injury victims. That is because the fact of a disability is not a factor that a judge is to consider in deciding parenting issues, unless that disability affects parenting. Obviously, a spouse can make the accusation that a brain injury impairs a person’s judgment or makes that person dangerous. Another allegation can be that the injured person has become dependent on medications that impair the ability to make decisions or parent. In some circumstances, a physical disability could mean that a person is unable to carry out important parenting tasks. When any of those accusations arise, it is important for the injured or disabled person to speak to a good family lawyer to develop a strategy to respond to them. That strategy may involve hiring other professionals to disprove the concerns and convince the judge that the injured person deserves to be an involved parent.
A good family law lawyer, working with a personal injury lawyer, will protect the benefits and settlement proceeds that an injured person requires to meet his or her needs throughout life.
[Podcast #21] How Family Law Can Take Away a Personal Injury Settlement
This is in the Ontario Family Law Podcast. My name is John Schuman. You can reach me at www.devrylaw.ca or by calling 416-446-5847. I hope that you found this discussion of common law relationships helpful and informative. We will talk again soon about other family law topics. Thanks for listening.