Are My Assets In Danger If My Spouse Causes a Car Accident?

Hossein Berenji, Feb 12, 2019

In the middle of a contested divorce, you learn that your spouse has been involved in a car accident. Your spouse is fine, but the driver in the other vehicle suffered severe injuries and may not be able to work ever again. Now your spouse is being sued. The other driver wants to be compensated for medical bills, property damage, lost wages, and pain and suffering.

What does this accident mean for you? Can be you liable for the damage caused by your soon-to-be ex’s car accident?

Community Property Up For Grabs in Personal Injury Lawsuits

During a divorce, you’ll be required to disclose and classify all of your assets. Your property will fall into one of two categories: separate or community.

Separate property refers to assets that you owned before you got married. It can also include gifts and inheritances that were given to you, and you alone, while you were married.

Community property refers to assets that you obtained or acquired the right to after you got married. This can include income, wages, retirement benefits, bank accounts, real estate, and personal belongings.

Separate property is yours, while you and your spouse both own community property.

When your spouse is sued for damage caused by a car accident, the community property you share could be in jeopardy. The property could be seized or subject to liquidation to compensate the injured accident victim. In other words, you could be liable for your spouse’s debts after a car accident.

This is true even if the majority of community property is technically yours. When you’re married, your income, business holdings, and assets don’t just belong to you. They can also belong to your spouse. If they’re liable for an accident, your hard-earned property could be targeted in a lawsuit.

Can I Protect My Property If My Spouse Causes an Accident?

It may be possible to protect some of your property. Generally speaking, assets that are classified as separate property are easier to protect.

Convert to Separate Property

Once your property is classified as community property it can’t be changed, right? Not necessarily. It is possible to convert community property to separate property (and vice versa). However, your spouse will have to be on board with this move. You’ll essentially have to execute a private contract that revokes all of your spouse’s ownership rights in regard to a specific asset.

Why is separate property better? If your spouse is sued, courts and creditors can’t go after property that they don’t legally own. Since separate property is entirely yours, they won’t have a legitimate claim. Your property will be safe from your spouse’s debts.

Use Separate Financial Accounts

It’s easier to protect your property if it’s not comingled with your spouse’s. Consider having your paychecks and income deposited into an account that is only in your name. It will be more difficult to seize your money if your spouse’s name is not on the account. You can even make the argument that you both intended for your property to be separate. If that argument is successful, you’ll be able to protect your assets.

Get Help Protecting Your Assets

Figuring out how to divide marital property can be challenging enough on its own. Things can get more complicated when your spouse causes a car accident. The property you’re fighting so hard to get in the divorce could be seized to pay off your spouse’s debts. Fortunately, there are ways to protect yourself and your assets from your spouse’s mistakes.

An experienced attorney will be able to list and explain all of your legal options. Working with an attorney will also help to ensure that your property is protected and secure. Contact our Los Angeles family law attorneys today to learn more.