In June 2024, I had the pleasure of recording a podcast with my colleague and JGL’s personal injury attorney, Renee Blocker. You can listen to the podcast here.
This blog explores some of the highlights from the podcast from the family law perspective.
Can my spouse get a share of my personal injury award if we divorce?
It depends upon 1) whether the award is marital or non-marital property and 2) when the award was received.
Marital or Non-Marital:
Non-marital property is property that belongs to one spouse and cannot be divided in divorce. (Often non-marital property is premarital, inherited, gifted, excluded by valid agreement like a prenup, or directly traceable to these.) Marital property is property that can be divided in a divorce.
Personal injury awards are generally non-marital, except for joint claims for loss of consortium and reimbursement of:
- Medical expenses
- Lost wages, of injured person & their spouse
So, personal injury awards for pain and suffering, damages for inability to perform “functions of daily living”, non-medical damages, diminished earning capacity, and future lost wages are non-marital property. Interestingly, damages to real or personal property can also be part of a personal injury award, and the law is not developed about whether these would be marital or non-marital. Logic points to these being marital if for a marital asset and non-marital if for a non-marital asset.
Timing of the personal injury award:
Timing matters because:
- a personal injury award for injuries before marriage is generally non-marital
- a personal injury award received for injuries during marriage (and before a marital breakup) are marital and non-marital as discussed above
- a personal injury award received for injuries during marriage but after a breakup may also be marital and non-marital, but less of it may be marital if there was little to no loss of the marriage (since a breakup had occurred)
Interestingly, a workers compensation award prior to marriage for loss of earning capacity during the marriage may be treated as marital property. So, timing isn’t always a deciding factor. Sometimes, the purpose of the payment is.
Other factors:
Other factors can impact whether a personal injury award is marital or non-marital. Such as:
Commingling:
- In divorce, non-marital property that is mixed up with marital property becomes marital if the non-marital and marital parts cannot be separated.
- So, where a personal injury award is deposited and what else is deposited with it can change the non-marital parts to marital.
- Commingling can also occur when no new funds are added during the marriage but the marital and non-marital funds get mixed up. This can happen due to withdrawals from the account or active investing (repeated buying and selling) within an account.
Documentation:
- Lack of documentation about or breakdown of the part of a personal injury award can make it difficult to impossible to prove what’s non-marital. In divorce, the person claiming property is non-marital is responsible for showing evidence and proof.
Takeaways:
It’s complicated. Keep documentation about your personal injury award, including details of what it was for. Separate and keep separated marital and non-marital parts. Beware of adding money during the marriage to your personal injury award. Keep track of how you use your personal injury award. Seek legal advice.
JGL represents clients both in personal injury and family law matters. We have the knowledge and experience to help you work through these complex issues.
