While divorce can be an extremely overwhelming process, it could be more difficult in the event of an injury caused by a negligent party. Not only does the injured spouse need to recover by potentially missing time off work, he/she must also negotiate the terms of a divorce agreement, which could result in a heated dispute.
But what happens to a personal injury settlement in a divorce. In California, it depends on certain circumstances.
If an injury occurs during the marriage, the non-injured spouse is entitled to half of the money. California is known as a community property state, meaning that a judge is required to divide all marital property—also known as community property—even between each spouse.
However, judges have the discretion to take into consideration the specific needs and economic conditions of each spouse, so various courts have ruled differently when an injury happens over the course of a marriage. Although some determine that personal injury awards are deemed “personal” and belong only to the injured spouse, others attempt to figure out which damages apply to which spouse.
For instance, the compensation designated for lost wages or lost earning potential could belong to both spouses because income is considered shared marital property. If the marital property was spent on the injured spouse’s medical bills, then the non-injured spouse is entitled to reimbursement.
On the other hand, if the injury occurred prior to the marriage or after both spouses are living separately, then the injured spouse would be entitled to the entire personal injury award. Again, if the injured spouse uses marital property to pay for medical expenses, then the non-injured spouse is entitled to reimbursement.
If you wish to protect your personal injury settlement during a divorce, follow these steps:
- Seek advice from a lawyer – An experienced divorce attorney and a personal injury lawyer can address all of your concerns about the potential division of your award.
- Ensure you specify the damages – Your lawyer can make a request to specify which award amounts have been allocated to cover which damages in order to avoid potential arguments with your spouse.
- Keep money separate – To avoid mixing your settlement funds in a community account, open a separate bank account. But before taking this action, speak to a lawyer.