I’m getting a $100K personal-injury settlement. Will my estranged wife get any of it?

“Twelve years ago, I received $100,000 as an inheritance after my father passed away — and I was broke less than nine months after receiving that money.” (Photo subject is model.) - Getty/iStockphoto

Dear Quentin,

I’m about to receive a little more than $100,000 (after medical bills and my attorney get their cut) from a settlement. My wife and I have split up and I moved out due to the stress caused by the accident I was in. We have a 4-year-old daughter and share custody 50/50. We’ve never had a mutual bank account nor have we shared any major assets over the four-plus years we’ve been married.

Also, we were hit by two major hurricanes last year within two weeks of one another and, while we were recovering from those hurricanes, we maxed out all of my credit cards — and agreed we would repay those cards off with any money we would receive from any disaster-recovery assistance we received, as well as our tax return at the beginning of 2025.

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My wife secretly kept the disaster-recovery assistance and never notified me that we received it. At first she said it was $300, then $500 and, finally, she admitted that it was $1,000, and I’m assuming that I’ll never know the truth. When we received our nearly $7,000 tax return, she did give me $800 to pay towards my $4,000-plus credit-card debt from the hurricanes and our daughter’s 2024 Christmas gifts.

Twelve years ago, I received $100,000 as an inheritance after my father passed away — and I was broke less than nine months after receiving that money. I’m extremely concerned that the same thing will happen. I don’t make a lot of money because I can’t work as much as I used to prior to my accident a year ago. As I am a freelance worker, I make less money when I put in less work.

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Changing careers

How can I figure out how to pivot careers and find something that will provide me with a better salary, and possibly use this settlement money to do so? I currently have plans to pay off my car and buy a truck and I’d love to put a down payment on a condo. Aside from that, I’d also like to set something up for my daughter to make her future a little easier.

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Do you advise investing in or maybe buying a business, and becoming a certified professional (possibly a project manager or a similar industry that is expected to see major growth over the next 10 to 20 years)? I feel like any trust I may have had in my wife to look out for our family’s best interests is gone because that $4,000 debt has increased quite a bit and my credit score dropped down lower than it’s ever been.

I was injured in August 2024 and the hurricanes hit in September and October. I’m usually the one in charge of these financial decisions, but since I was severely injured and recovering I needed her to take over for us. Now, due to these credit cards not being paid in nearly a year, the cards have been cancelled. I also have quite a large amount of debt to pay off when this settlement comes in.

She received a small amount of money and she had no qualms wasting it while lying to me about it. On top of that, she tries to justify it and has never taken any accountability for these actions. I’m terrified that when I get money that I haven’t worked for, that it’s something I don’t deserve and that this will cause me to waste it like I did with my father’s inheritance. I want to do whatever I can to prevent that from happening.

Separated and In Debt

Related:‘She lives alone’: My mother-in-law, 86, gets $1,300 in Social Security. Is that enough to live on?Whether your wife is entitled to any of the $100,000 will depend on what state you live in and/or whether you are legally separated now. - MarketWatch illustration

Dear Separated,

Take a deep breath — and put that $100,000 in a separate bank account.

There’s a lot going on here: settlement, separation, divorce, investing and career. We can’t solve all of this in one letter, nor can you solve all of these dilemmas in one day. But you can take a step back, make a list and prioritize your actions for the next six months, and then revisit that list after that time is up. Your career moves are a topic for another day; right now, you need to document your finances and pay off your debts.

There’s a question mark over your $7,000 tax return and why you only received a small amount from that when you have $4,000 worth of credit-card debt. Document all recent financial events and transactions. You will need that for divorce court. Whether your wife is entitled to any of the $100,000 will depend on what state you live in and/or whether you are legally separated now. You need an attorney to help you out.

In New York, “if you were injured and compensated for those injuries during the time you were married, your personal-injury settlement may be considered marital property,” according to Rosenblum Law. “If you were injured and compensated before you were married or after you or your spouse filed for divorce, your settlement is probably going to be considered your separate property.” But there are many other variables at play.

When you get your $100,000 settlement, whether or not it is separate rather than marital property, pay off that credit-card debt. You are losing money at a furious rate with credit cards that are charging double-digit interest rates. That, plus inflation, is eating away at your finances. Don’t tell people about your settlement; that will just open you up to offers of “business opportunities” that are likely to go awry.

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Financial therapy

You don’t need to be your estranged wife’s accountability couch, but you can ensure that you make your case for a fair divorce with legal counsel. My hunch is that the $1,000 disaster-recovery assistance will be small potatoes when you both put your cards (and various bank statements) on the table. After paying off your credit cards, your daughter and your future financial stability will be paramount.

The multilayered aspect to your letter makes me think that you are probably under a lot of stress at the moment — and no wonder. You are dealing with several major life events: debt, separation, natural disaster, all while attempting to create a calm and consistent environment for your daughter. Life is less overwhelming when we deal with things one at a time and, for that reason, a financial therapist might be of help.

You rightly are concerned about not making the same financial mistakes of the past, and that realization and awareness is an important first step. Your experience with the credit-card debt and hurricanes tells me that you need an emergency fund/cash cushion to see you through future adverse events without having to put your expenses on plastic. And it does sound like the time has come to seek a full-time job with benefits.

When the dust has settled on your divorce, you can consider a 529 tax-advantaged college plan for your daughter, the aforementioned emergency fund with six months of expenses, contributions to an exchange-traded fund or index fund, extra money in a CD or high-interest savings account, downpayment for a condo, and perhaps some money set aside for further education in a field of your choice.

The less impulsive you are, the more trust you will have in yourself.

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Previous columns by Quentin Fottrell:

‘I have a great mortgage rate’: I need $80K to buy my husband out of our home. Do I raid my $180K Roth IRA?

‘I’m tired of corporate America’: My wife and I have $1.65 million. I’m 61. Can I retire already?

‘I don’t know anything about investing’: I’m inheriting a $150K IRA. What should I do with it?

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