Car Accidents

Your spouse was recently involved in an Orange County car accident. It turns out that they’re at least partly responsible for the crash. Now they’re being sued for damages. Another person involved in the accident is demanding compensation for medical bills and lost wages, among other things.

The accident and lawsuit won’t just affect your spouse. Since you’re married, it’s possible that you could be held financially responsible for damages arising from the accident. Your hard-earned money and savings could be in jeopardy.

Married Couples Own Property Together

When you’re single, the property you own is yours, and yours alone. Things change when you get married. California is a community property state. This means that the property you and your spouse acquire after marriage belongs to you both equally.

Community property can include:

  • Income and wages
  • Retirement benefits
  • Checking, savings, and other financial accounts
  • Royalties
  • Intellectual property
  • Business interests
  • Real estate, and
  • Personal property.

In other words, your assets and property aren’t just yours anymore. Your spouse has an equal right of ownership.

Community Property Vulnerable In Personal Injury Lawsuits

When your spouse is sued after a car accident, the property he or she owns can be vulnerable. This includes any property in which they have an ownership interest. Since your spouse has an ownership interest in community property your own assets could be at risk.

Let’s say that your spouse is entirely at fault for the accident. The plaintiff in the lawsuit refuses to settle and the case goes to trial. A jury awards the plaintiff $100,000 for their injuries. Your spouse will have to find a way to come up with that money. Assets belonging to your spouse will be targeted first. A court can order the seizure or liquidation of those assets. Creditors can also go after community property.

This includes your hard earned income, your family home, the car you drive, stock options, or any other assets classified as community property. You didn’t get into the accident, but you could be financially responsible for the consequences since you’re married.

Can I Protect Myself From My Spouse’s Car Accident Lawsuit?

Yes. There are ways to protect yourself in the event that your spouse causes a car accident. However, most of these protective measures have to be carried out long before an accident ever happens.

Keep Your Separate Property Separate

Not all property you own is considered community property. Any property or assets you had before marriage are considered to be your own separate property. Separate property is entirely yours. Your spouse doesn’t have any ownership rights to your separate property. This separate property won’t be affected by your spouse’s personal injury case.

Separate property can be converted to community property. This can happen if you add your spouse to the deed or title, or if you commingle funds. Converting your separate property and giving your spouse ownership rights would limit your ability to keep and protect it.

Change Community Property

Community property can also be converted into separate property. You and your spouse could agree to convert some community property into separate property that belongs only to you. However, it’s important to understand that this will strip your spouse of all ownership interests in that property. If you happened to get a divorce, your spouse would not be entitled to half of the asset. Instead, it would be yours, free and clear. However, as your separate property, it would be protected from creditors and the courts.

Maintain Separate Bank Accounts

Joint bank accounts are community property. You have little control over the assets in a joint account if your spouse is ordered to pay damages in a personal injury lawsuit. It’s more difficult for courts or creditors to go after property that’s not in your spouse’s name. You can protect your money if your name is the only one on the bank account.

Execute a Prenuptial or Postnuptial Agreement

There are ways to circumvent California’s community property laws. In fact, the laws are simply the default. You and your spouse can choose to designate your property however you like. This is done by executing a prenuptial or postnuptial agreement. A prenup is done before you get married, while a postnup is done after you’re already hitched.

Are you are concerned about your spouse’s driving habits or history of accidents? If so, you could protect some of your assets by classifying them as your separate property in a private contract between you and your spouse. However, you and your spouse would have to be in full agreement.

Do not hesitate to contact an experienced personal injury lawyer if you or your spouse have been involved in a car accident. An attorney can help to protect you, your rights, and your assets. Call the Law Offices of John Rapillo today to learn more.