Can I Claim Part of My Spouse’s Personal Injury Recovery in a Divorce Proceeding?
Here’s a scenario personal injury and divorce attorneys commonly see: A currently separated couple is in the middle of a divorce. As the proceedings are underway, one spouse receives a large settlement from a personal injury claim from a car accident injury. Who has a right to these funds in the divorce settlement? Does the spouse not involved in the accident have a right to recover a portion of the funds?
Divorcing spouses will be happy to know that they may have a right to some of the recovery. How much depends on when the settlement comes in,and the type of damages that are being compensated.
Marital Property and Assets
Generally, property and assets accumulated during the marriage are considered marital assets and are meant to be divided among the spouses in a divorce action equitably. Gifts or inheritance funds do not qualify as these types of marital assets. The fact you two people are already separated should not matter. The law states that the exact date of the divorce decree, not the separation date, is the last date for marital assets to accrue. Consequently, as long as a settlement or jury verdict from a lawsuit is recovered before the divorce decree is final, it is considered a joint asset. If it comes through after the divorce is final (the date of the divorce decree), then all the funds go to the spouse who was injured.
However, depending on the circumstances, not claiming that the recovery is a joint asset may actually be beneficial. For instance, if the asset is considered part of your spouse’s total assets, you may be able to assert that your spouse can make a lump-sum alimony payment. This may indeed be a better option than claiming it as a joint asset and seeking your share of the personal injury funds, because some of the damages your spouse received compensation for may be considered “personal damages” and are not divisible.
Damages awarded in personal injury actions cover different types of injuries. Damages can be awarded for financial losses, lost wages, medical expenses, and other types of property loss. Damages are also awarded for things like emotional trauma, pain and suffering, and loss of consortium, and these are considered “personal” as they compensate that individual for the pain, stress, trauma, or distress they experienced.
Your attorney needs to consider this situation carefully when you are faced with personal injury proceeds in a divorce action. Your attorney will likely need to review specific court or settlement documents to find out what kind of damages were awarded, and how much of the funds were apportioned under each different category. You may be able to claim a significant portion of the recovery if the damages are mostly monetary.
However, if a significant portion of the damages were awarded for personal damages, such as pain and suffering, emotional distress, or other damages considered personal, you may be stuck with less than you had hoped. In that circumstance, it may be better to allow the entire recovery sum to be considered part of your soon-to-be-ex’s total assets, which will then factor into any awards for spousal support or alimony.
If this all sounds a bit confusing—don’t worry! An experienced attorney can review your case, determine your options, and present them to you. Then you will have the optimal information to make a sound decision and can proceed with confidence and peace of mind.