Splitting up assets and liabilities during a divorce proceeding can be a painful experience, both emotionally and financially. It can get even more complicated when assets are accumulated while a divorce is pending. Such can be the case with a personal injury settlement award.
Take this example. You’ve filed for divorce against your husband, and the litigation is proceeding through the court system. During this separation, your husband is involved in an auto accident that is not his fault, and requires the help of a personal injury attorney Milwaukee trusts . He sustains a major injury and wins a substantial settlement from the at-fault driver. After this, questions may arise.
Although you are separated, he is still your husband. Therefore, are you entitled to a portion of the settlement award when it comes time to divide assets as part of the divorce?
It depends. If a family court judge determines that the injury award is joint marital property, then he or she may divide it between you and your spouse.
The first issue is what state you call home. In community property states, marital assets are handled differently in that all marital property is very often divided equally between the spouses at the time of divorce. Community property states include:
- California
- Arizona
- Idaho
- Nevada
- Louisiana
- Texas
- New Mexico
- Washington
- Wisconsin.
Community Property
A personal injury settlement is intended to compensate the victim for any damages they suffered due to the at-fault party’s negligence. Generally, when it comes to dividing assets in a divorce, the court breaks down the settlement award based on each cost that the award covers. For instance, lost wages are almost always treated as marital property. However, if part of the personal injury award is for pain and suffering, because that specifically addresses the victim, it’s usually considered separate rather than shared property. A family or divorce lawyer can review your case and offer legal guidance as to how a court is likely to rule in your unique situation.
Timing
What is also important to consider is at what time in the divorce process the settlement is awarded to the injured spouse. If the check arrives before the divorce decree is finalized, a court may compel the parties to split the person injury award if they consider it joint marital property. However, if the settlement does not arrive until after the ink on the divorce decree is dry, then the settlement proceeds might not be divided between the parties unless the divorce court already ordered that it should be shared.
Consult with your family law attorney about the legalities in your state. A knowledgeable lawyer can clarify whether or not you might be entitled to your soon-to-be ex spouse’s personal injury settlement award.
Thanks to our friends and contributors from Hickey & Turim, SC for their insight into personal injury practice.