Where’s Your Personal Injury Settlement during Divorce?
April 13, 2016
For those who are able to receive a personal injury settlement, the feeling can be relieving. But what happens when this compensation is awarded when the victim is in the middle of, or about to undergo, divorce?
In general, a personal injury settlement or award will be considered a personal asset – that is, not part of the marital estate. Exceptions to this rule exist where the settlement or award was itemized and included damages for things such as lost wage or loss of consortium. Most personal injury settlements or awards are not itemized. So, unless the funds for the settlement were commingled with other marital assets, they will not be subject to distribution in your divorce. Read further for a more detailed explanation.
Personal Injury Settlements and Awards
Personal injury awards and settlements compensate those who have been injured, due to the negligence of another person or entity. Personal injury settlement and awards typically includes compensation for the following:
- Damage to personal property
- Past medical bills
- Future medical expenses
- Lost wages
- Future loss of earnings
- Pain and suffering
- Loss of consortium
A personal injury award or settlement can represent a large portion of you and your spouse’s total assets. However, this doesn’t necessarily mean that it will be subject to division during your divorce settlement. Whether or not it is subject will primarily depend on the following factors:
- Whether you reside in a community property state or an equitable distribution state
- The date of the accident
- The date of your divorce
- If the personal injury settlement was itemized or not
In community property states, all assets acquired by either spouse during marriage are marital property, owned equally by the spouses, and will be divided equally in a divorce. Even if the assets were kept in a separate account, they still belong to the other spouse, as well. However, assets acquired before the marriage will be considered separate property, as long as they’re kept in the name of the spouse who owned them, and not commingled with other marital assets.
In equitable distribution states, unless you and your spouse come to an agreement on your own, all assets acquired by either spouse during the marriage will be divided in a way that the court thinks is fair – most often based on each spouse’s individual contribution to the total amount of marital property. For example, two-thirds of the assets may go to the lower wage-earner and one-third to the other spouse. Furthermore, certain assets may be distributed to a spouse in lieu of alimony or as equitable compensation for a particular marital debt.
How Florida Deals with Personal Injury Settlements and Awards During a Divorce
Florida is an equitable distribution state. As such, your personal injury settlement or award will only be divided in the following circumstance(s):
- The settlement or award includes compensation for lost wages or loss or consortium.
- The proceeds from the settlement or award have been commingled with other marital assets.
- Other marital funds were used to pay for medical bills.
The non-injured spouse has a fundamental right to participate in any compensation for marital earning that were lost due to your injuries, and for any loss of consortium between the spouses. Therefore, settlement funds may have to be distributed in your divorce, if they have been commingled with marital assets; this commingling makes the funds difficult, if not impossible, to separate from other earnings. Furthermore, if marital funds were used to pay for medical bills or other expenses incurred as a result of the accident in which you were injured and before the settlement or award was obtained, then part of the settlement may be used to reimburse the marital estate for this payment.
The division of assets in Florida divorces is oftentimes a complicated process and can be very confusing. Only an experienced Florida divorce attorney should advise as to what assets may be considered part of your marital estate, and therefore, subject to division in your divorce.
Protecting Your Interests After a Bradenton, FL Divorce
Your finances may dramatically change after divorce. At the Jodat Law Group, we can help you protect your financial health and plan for the future during this difficult period in your life. Contact the expert Personal Injury Claims attorneys at 877-912-2671 or schedule a free consultation online today. We will evaluate your case and explain your financial options.