If you or your spouse has received a personal injury settlement in the past, it’s important to know that this settlement may be a point of contention in a divorce. The way that this settlement may be divided depends largely on state legislation and circumstantial factors. Many states offer residents a comprehensive guide for evaluating each component of the settlement to determine how much money may be divided in a divorce.
In some cases, it’s possible that no part of the settlement is legally considered communal property and therefore cannot be divided. However, in most cases involving a large personal injury award, it’s likely that at least a portion of the settlement would be considered communal property.
Many states consider communal property to be any and all income that has been acquired during a marriage. Even if one spouse was the primary income earner, the entirety of this income may be considered jointly owned by both spouses.
In states where a personal injury settlement is considered personal income, this could mean that the settlement becomes communal property as well. However, some states consider certain assets, including certain components of personal injury settlements, to be separate from personal income in a divorce scenario. To understand how a personal injury settlement might be divided between divorcing spouses, it’s critical to understand that several components make up the average personal injury settlement.
Components of a Personal Injury Settlement
If compensation for pain and suffering is awarded, this is typically only considered individual property because it compensates the individual victim for his/her intangible suffering. These damages may be awarded as a way of validating the person’s pain. They may also be awarded as a punitive measure against the liable party if extreme negligence or wrongdoing was a factor in the accident.
A personal injury settlement often provides compensation for the victim’s medical costs, and this component is generally considered individual property as well. The exact division of medical treatment compensation can vary quite a bit, however, depending on the severity of the injuries.
Loss of income is another component of a personal injury settlement, and this component is more likely to be considered communal property.
It is easy to see why it may be beneficial to hire an experienced and effective personal injury lawyer if you’re dealing with a personal injury case, but it might come as a surprise that a personal injury lawyer could also be helpful in a divorce case. If you have ever been involved in a personal injury claim and you’re now involved in a divorce, it may be in your best interest to reach out to a divorce attorney Phoenix AZ trusts that can defend your rights.
Thanks to our friends and contributors from Hildebrand Law for their insight into dividing a personal injury award in a divorce.