Malpractice settlement and AL divorce

[disabled]

I was awarded a settlement from a malpractice suit that was strictly for pain and suffering. The award has been put into an investment account in my own name and kept separate from marital assets. While I believe the award is not divisible in a divorce are investments that have been made from it (also kept in that same account) considered marital assets?

I should note that for the 1st and only year, the gains/losses were filed on a joint account. The result of doing so got an additional $1,000 refund from the feds. This years return hasn't been filed yet and I'm not going to do it jointly until I understand this issue.

[Lexus]

In a community property state, each spouse is considered to have a one-half interest in the assets acquired during the marriage. Money and property acquired before the date of the marriage are not included in community property calculations. If the money received as a personal injury settlement is deemed compensation for pain and suffering, it will not be considered community property. These funds are the property of the recipient only, since it was that individual who experienced the discomfort following the accident. A personal injury settlement for pain and suffering may be considered community property during a divorce action if the funds become co-mingled with other marital assets. A person who wants to be sure that his or her personal injury settlement is not included in a community property calculation should deposit the funds in a separate account. If the money from a personal injury settlement is used to buy something that the couple uses together, that item may be considered community property if they later divorce. As you have put the settlement amount in separate account and kept separate from marital assets, it will not be treated as marital property. It is better advised that you may consult with a Family Law Attorney who can give a proper guidance in this regard.

thanks for the reply. this is not a community property state but an equitable distribution (Alabama).

Does co-mingling the investment gains/losses on a joint tax form make those gains a marital asset.

I will seek the advise of an attorney as soon as I can get into see them. I'm concerned about what I have done already.

[Friend In Court]

The filing of a joint tax return should not constitute co-mingling of assets -- only the actual use of the funds, e.g. depositing in joint account, using for marital debts and purposes. You can check with a tax accountant, a CPA, if you are concerned, for that person is up on the Tax Code at all times.