Greetings. Congratulations on going to counseling and having a positive outlook. A personal injury settlement is usually part marital and part separate. The lost wages are marital, but the pain and suffering portion of the claim is separate. Therefore the settlement needs to have the way the settlement amount is structured.
If you use your settlement to pay off the house, you are gifting the money to the marriage. No, tracing the money is insufficient if you spend the money on marital expenses. You must maintain the funds separately.
When in doubt, keep the funds separate and have your personal injury attorney delineate how much of the settlement is for pain and suffering and how much is for other damages. Thank you.
Janet L. Fritts
Attorney with Rosen Divorce
4101 Lake Boone Trail, Suite 500
Raleigh, North Carolina 27607
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service but a full discussion with an attorney should be undertaken before taking any action.