Is my spouse entitled to My Personal Injury Settlement during divorce/ separation?

Even though divorce itself is an emotionally exhausting process, encountering a severe injury in an accident during proceedings can make the matter more stressful and complicated. The first query to pop up in such a situation stays the same, ‘Is my spouse entitled to my personal injury settlement or not? While there are high chances that your spouse may have the right, the accurate answer for your situation depends on your marriage’s particular circumstances.

Married adults tend to get comparatively higher verdicts and settlements as compared to singles. Here, I am not talking about someone who is 24 years old or younger in the USA. Since 24 is below the age of the average married adult in the USA. Married people who face injury have better prospects of higher settlements against the suffering or loss of delight married life due to the accident.

Also, in financial terms, married adults are generally more stable than single. Thus, resulting in married individuals to receive more money for suffering and loss than singles.

Personal Injury Award as Separate Property:

There is a rule applied to personal injury awards.  It says that the settlement acquired is distinct from the marital property. In the case of a separation/divorce, it will be considered individual property and will not fall into the settlement of a divorce. The typical division of the assets asks for all accounts, funding, holdings and property to adhere to a division that is based on the judge’s verdict. It will include the debts as well as other liabilities too. Due to the differences in every case, what the court decides it becomes your case’s rule. However, a personal injury settlement is usually not counted as a community / marital property as it is a reclamation of the damages, not of the couple but of the individual.

Exploring the Marital Property

The marital property refers to everything and anything obtained while the marriage is intact. However, there are some states that consider a few items as individual property and they make sure that the specific person who has earned it must have it once the relationship is no more. In a regular divorce procedure, marital property includes property registered in the name of one or both, any joint bank accounts, or any asset that the couple has used over time.  This may also take into account a car that is in only one person’s name, but both have used it at some time and similarly the other assets used by the couple.

Understanding Individual and Community Property:

To comprehend well about the laws related to personal injury gain for yourself and your spouse’s share, we must understand what individual and community property are.

Individual Property:

Personal injury settlements that are provided to the injured spouse are usually private and labeled as an individual property. This determines that the compensation is apart from the marital property / community property since it belongs to one person only. However, exceptions are there when a spouse receive the amount and mix them with marital / community property. The other exceptions come up when a judge wants a hearing/inquiry to conclude if the particular asset or money needs to be tagged as a marital property or not. Mainly dependent on the specific court and case, the individual property may go through a division during the divorce.

Community Property:

As per a few state regulations, individual earning is also referred to as community property. It remains dividable in the course of a divorce without considering how much both partners contributed, acquires, or accumulates in the married life. The sole exception comes when the asset is confirmed as separate property. They should exist as owned or claimed before the married life, such as a possible gift or an amount received in compensation for suffering and pain from the personal injury settlement case. Other than these, the other areas of settlement might be considered as community property, as it would be acquired, bought, or received during the marriage.

Why does the category of property matter during a divorce?

The two types of property that hold the most significance during the divorce course is community property and individual property. Community property or marital property is usually divided between husband and wife at the time of marriage is being dissolved. This division does not take place on the basis of fifty-fifty. The court has to make a justified and right decision regarding the division of the property.

However, each partner will remain the owner of his / her declared separate property in the process of divorce. Therefore, it is essential to determine whether the compensation received against the injury or the settlement of the damages is a community/ marital or individual property. In case, if your injury settlement is tagged as a community property, then the spouse is entitled to receive a part of compensation or award received for the injury or at the time of divorce; otherwise, you, the injured spouse, can own all of it.

Is My Spouse Entitled to My Personal Injury Settlement?

To determine the portion of the compensation or settlement award involves a lot of technical analysis. Since, if it is proven that the compensation received or the personal injury award is a community property, then the partner will be the part-owner to his / her share at the time of divorce.

Often overlooked, a key consideration when deciding the owner of the settlement is what the partner in marriage is receiving as an injury settlement or award. Personal injury can vary depending on the accident that occurred; it might include economic or non-monetary damages. Compensations for the damages can consist of pain and suffering, medical bills, lost earnings, etc. Some of the suffering or financial loss is likely to be considered the separate or individual property of the partner who has not been injured. At the same time, there is a possibility that the whole loss was endured by the wounded spouse, making him/her the only owner of the settlement award.

Mentioned below are the listed damages which can be referred to as a separate property:

  • Suffering and Pain (it will also include mental pain and anguish)
  • Loss of a spouse’s companionship and love
  • Disfigurement.

In contrast, a number of the damages and injury can be categorized as marital or community property. Following is the list of such considerations:

  • Damages that are tailored in order to compensate one partner for any damages to the community property.
  • Earning capacity loss while the marriage was intact.

Additionally, remember that disability compensation and workers’ compensation payments are usually considered community property, specifically if the settlement is tailored for the injured spouse’s lost earnings.

In the USA, there’s a common belief that a property which is owned by one spouse at the time demise or separation is a community property unless it is proved by convincing and clear evidence as a separate property. If the spouse who has been awarded a settlement for personal injury wishes for the amount to be referred to as individual property, that partner has to prove that the awards are a separate property.

Remember that it won’t matter if married couples are separated before the personal injury settlement. In case, if the jury’s judgment or the settlement is received prior to the divorce and is finalized, some part of the award is to be recognized as a community property.

Tips for Protecting Your Personal Injury Award or Settlement:

Firstly, you should ensure that you keep the received amount separately and do not mix it with any received awards with community property. When mixed with a community property, the separate property turns into community property. For example, adding received money to the joint bank account will cause the award money to be dealt with as community property.

Next, ensure that you inform your attorney that you are or will soon be ending the relationship. The hired lawyer can provide you with scenario-based tips to confirm that you get the significant chunk of the personal injury settlement during a divorce. Mostly, your lawyer can offer you advice that can assist you in protecting your property. He will help not to have it referred as marital or community property.

Lastly, at the time of the settlement, you must ask your injury lawyer to use explicit language in the injury settlement documents, clarifying the damages that are separate property and the ones which are community property. As previously mentioned, people believe that any property acquired during marriage is a community property in the USA. In the settlement, the usage of specific language can help overcome the presumption and act as strong evidence. This doesn’t mean that your partner will be no longer entitled to her share of the assumed damages, but will indeed have some worth in the proceedings.

As you have read through the various components of the settlement ownership, you can conclude how complicated the issue is. Suppose you are injured and are simultaneously in the process of a divorce. In that case, it is essential to look out for legal advice from a personal injury attorney or a family lawyer who has expertise in these issues and also knows how to protect your interest in the case of divorce or separation.

Recent Posts