Personal injury awards tend to be large amounts of money. Therefore, if you have recently received a settlement check, or you are expecting one soon, it is understandable that you will be concerned how it will be divided during your divorce.
The Nature of the Damages
Some courts use the nature of the damages to determine how to divide the settlement between the two of you. In such courts, the general rule is to award the settlement to the person who actually suffered the loss. For examples, lost wages is something that affects both spouses, so it is considered marital property and divided between the two of you. On the other hand, pain and suffering award would be given to the injured spouse who actually experienced the pain.
Commingling Of the Settlement with Marital Assets
This factor applies in cases where you have already received the settlement check. In this case, the court may scrutinize where you kept the money, whether you used it, and how you used it. The result of that scrutiny determines whether who gets the money.
For example, if you kept it in a separate bank account, then it may be awarded to the person who actually suffered the injury. However, if you kept it in a joint account where you normally keep all your savings, then it may have commingled with your marital assets, in which case it may be divided between you just like any other marital asset.
State Laws
A few states have specific laws that deal with personal injury awards during divorce. Division of injury awards in such states may be easy because all you have to do is to follow the state's laws. For example, if the laws state that injury settlements are marital property, then you will divide it just like other marital properties.
When the Accident Occurred
The timing of the accident that caused the injury may also determine how the settlement is divided. In some states, property acquired if you are living separately isn't considered marital property. In such states, this is even more likely if you are living separately because you have decided to divorce. If you are injured during such a separation, then your state laws may result in you getting the injury settlement as part of your separate property.
If you are anticipating a personal injury settlement, prepare in advance to safeguard your interests during property division. For example, you can do this by depositing the settlement check in a separate bank account, so the money doesn't commingle with your marital assets. Your divorce lawyer and injury lawyer can also work together to safeguard your interests if you inform them about your concerns. Contact a law firm, such as Finocchio & English, for more information.
