Does my spouse get a piece of my settlement proceeds from a personal injury case if I get divorced?

Posted in divorce and personal injury on January 8, 2020

Should I hire an attorney if I am in the middle of a divorce and get injured in an accident caused by another person or business?

Accidents happen to folks going through divorce. What if a spouse gets injured due to the fault of a third party, files a personal injury lawsuit, and receives a big settlement? Is the other spouse entitled to at least a portion of the settlement proceeds? In a divorce proceeding, marital property is subject to an equitable division. Under Georgia law, settlement proceeds from a personal injury case may be partially subject to equitable division in a divorce proceeding. For your legal interests and rights to be protected in both your divorce case and personal injury case, you may want to at least talk with an attorney that specializes in family law and another attorney that specializes in personal injury. If you have already hired attorneys for your divorce case and personal injury case, it is important for both attorneys to communicate with each other to bring about favorable results.

What is marital property?

Property includes both tangible and intangible property. Generally, property acquired during the duration of the marriage through either or both spouses’ efforts is deemed to be marital. For example, a marital residence purchased after the date of the marriage with marital funds will be considered marital property. In Georgia, property that is deemed to be marital could be subject to an equitable division during a divorce proceeding. For example, the value of a business, if deemed to be marital, could be subject to an equitable division.

What is separate property?

On the other hand, separate property is not subject to an equitable division. Property acquired by a spouse through inheritance or acquired before the date of the marriage is generally considered separate property of that spouse. If a piece of property is found to be a spouse’s separate property, 100% of that property will go to that spouse.

How is marital property divided in a divorce?

Courts in Georgia look at various factors, including each spouse’s behavior towards the other spouse, when deciding how to split marital property. Equitable division does not necessarily mean an equal split; it means a fair division based upon the circumstances.

What kinds of compensation are there in a personal injury case that my spouse might go after in a divorce case?

There are three main types of compensation you could get in a personal injury case: (1) special damages; (2) general damages; and (3) punitive damages. Special damages, or economic damages, include past and future medical expenses, lost wages, damage to property, and other out-of-pocket monetary losses. General damages, or non-economic damages, include compensation for pain and suffering, loss of enjoyment, loss of consortium, and other damages that are more subjective. Punitive damages are available when the at-fault individual’s actions are so egregious that additional damages are warranted to punish that individual. Unlike special and general damages that are not capped, there is a limit to the amount of punitive damages you can recover in Georgia. Different states have different rules.

Is my personal injury settlement proceeds or jury award considered marital property subject to an equitable division in my divorce case?

In Campbell v. Campbell, the Supreme Court of Georgia explained which portions of personal injury settlement proceeds are subject to equitable division. “The property which we have found to be outside the marital estate is property which is very personal to the party to whom it belongs and property which was in no sense generated by the marriage. A personal injury claim settlement, to the extent that it represents compensation for pain and suffering and loss of capacity, is peculiarly personal to the party who receives it. For the other party to benefit from the misfortune of the injured party would be unfair. However, to the extent that the settlement amount represents compensation for medical expenses or lost wages during the marriage, the settlement may be considered an asset of the marriage. Any amount which is attributable to loss of consortium is not an asset of the marriage but is the estate of the spouse who suffered the loss of consortium.” Campbell v. Campbell, 255 Ga. 461 (1986). Thus, the portion of the settlement proceeds that is applicable to something that is very personal to the injured spouse, such as pain and suffering, will not be divided, but the portion of the settlement proceeds that is not very personal to the injured spouse, such as medical expenses, may be divided during divorce.

Why should my divorce attorney communicate with my personal injury attorney?

If you reach a pre-suit settlement agreement with an insurance company, for example, they will generally require you to sign a document called a release form. The exact wording and substance of a release form will depend on the circumstances surrounding the settlement and who is drafting it. The release form will state a specific dollar figure representing the total amount the insurance company will pay you in exchange for execution of the release form. Oftentimes, the release form will not contain a breakdown of the total amount specifying which portion is attributable to which damages. For example, the release form might state that the insurance company will pay you $70,000 in exchange for a general release without specifying how much of that $70,000 is attributable to pain and suffering, medical expenses, lost wages, lost earning capacity, and so on. That lack of breakdown of the settlement amount may cause some trouble when the court is trying to figure out which portion of that $70,000 is marital property subject to an equitable division. Thus, if you get injured due to the fault of a third party during divorce, it would be wise for you to let your personal injury attorney know of your divorce case.