Will my Personal Injury Settlement be Divided in my Divorce?
Under most circumstances, no. When you receive compensation for your medical bills, lost wages, and other damages through a personal injury claim, that money belongs solely to you to cover what you spent to have your injury treated and the expenses you will face in the future because of the injury.
Like many other legal questions, though, the real answer to this is “that depends on the circumstances of the case.” There are many scenarios where an individual’s personal injury compensation is subject to division in his or her divorce.
Personal Injury Compensation is a Personal Asset
Typically, compensation received through a personal injury claim is considered a personal, or separate, asset. This means that it is not subject to division during a couple’s divorce. Other separate assets include gifts, assets obtained through inheritance, assets designated as separate by a prenuptial agreement, and assets each spouse owned prior to entering the marriage that have not changed in value during the marriage.
When Personal Injury Compensation is a Marital Asset
Separate assets become marital assets when they are commingled. This means that they change in value because of their owner’s spouse’s actions during the marriage. It can also mean that they were mixed with other marital assets, like an individual’s savings account being merged with his or her spouse’s to create a joint saving account when the couple married.
When personal injury compensation become a commingled asset, it is subject to division under Florida’s equitable distribution requirement. Circumstances where this is the case include:
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When a compensation settlement is itemized and a specific portion is meant to cover the victim’s lost wages, that compensation is subject to division in the couple’s divorce. This is because wages earned during a marriage are marital property and the injured spouse’s inability to earn a wage negatively impacts both partners;
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When the money is used to compensate the couple for marital funds spent, it is subject to division. To understand this scenario better, imagine that a woman is injured in a car accident. She pays for her outstanding medical bills with money from the checking account she shares with her husband. When she receives compensation for those medical bills through a personal injury claim, that compensation technically “belongs” to the joint checking account, making it marital property; and
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When compensation received through a personal injury settlement is commingled with other marital funds and used to pay for marital debts. This happens when settlement money is deposited into a joint account, then that account is used to pay for marital expenses. By doing this, the couple can make it very difficult to determine which portion of the money was obtained through a personal injury settlement.
Work with Draper Law Office to Complete the Divorce Process
When you are preparing for a divorce, it is important that you take the time to fully understand how all of your marital assets may be divided in court. Contact Draper Law Office online or by calling 866-767-4711 today to schedule your initial consultation in one of our two convenient offices: Kissimmee, and Orlando.
