Are Personal Injury Settlements Considered in Divorce Cases?

November 18, 2020

personal injury settlements

Some of the most common questions about divorce relate to how property and finances are divided. Since marital property is divided, what happens if a personal injury settlement is incurred during a divorce case? Divorce settlements require the determination of property ownership. Making this determination can be relatively simple to fairly complex. The complexity comes from documenting property and finances and establishing what constitutes personal property and what would be defined as marital property.

What is Marital Property?

Marital property can be defined as property that belongs to both spouses rather than one individual. An example would be if a married couple buys a house together. Both of their names are on the paperwork and both make house payments. The house does not specifically belong to one person over the other. This is why settlements become necessary and why the process can be complicated. Determining possession of personal property can be as simple as each spouse taking back their own possessions. Splitting marital property, however, is more challenging.

Personal Property and Marital Property

Personal property belongs to one individual. Property in this context does not have to refer to physical items. It can also refer to income and financial accounts. When talking about physical items, personal property seems like a simple concept. For example, if a husband owned collectible baseball cards before he got married, they will likely be viewed as personal property because he had them before marriage. However, it is not always this easy. What if one spouse had a bank account in their name prior to getting married? If both parties used the account during the marriage, it is more difficult to argue that it is one person’s personal property.

Personal Injury Settlements in Divorce

What happens if one spouse has funds from a personal injury settlement? In most cases, compensation from a personal injury settlement will be considered personal property for the injured party. This means that in a divorce case, it would be considered separately from marital property. It is not guaranteed that compensation from a settlement will not be divided. A spouse can claim a portion of a settlement, and the court will decide if a portion of it should be considered marital property. There are a great deal of considerations for the court to take into account, and every situation is different. Considering how much each case can vary, it is wise to consult a lawyer specializing in family law for any questions regarding divorce settlements.

Moorestown Divorce Lawyers at Stockton Family Law Help Clients Understand Property Division During Divorce

Our trusted Moorestown divorce lawyers at Stockton Family Law assist clients with difficult divorce cases. If you have questions about how your personal injury settlement will affect your divorce case, one of our lawyers can help. Contact us online or call us at 856-412-5052 for an initial consultation today. Located in Moorestown, New Jersey, we serve clients throughout South Jersey, including Burlington County, Camden County, and Mount Laurel.