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Personal Injury Settlements Are Divisible In A Divorce Case

On Behalf of | Feb 14, 2013 | Divorce & Family, Personal Injury

When parties are divorced, the trial court must equitably divide the marital property. Property is broadly defined as all tangible and intangible assets, real or personal, belonging to either or both of the parties regardless of whether title to the property is held in an individual’s name of jointly.

A question has existed as to whether a lump sum personal injury or workers compensation settlement is divisible marital property. A lump sum settlement compensates an injured person for a number of claims including lost wages, future income, pain and suffering, medical bills, and other consequential losses. In the recent case of Heinrich and Heinrich, the husband argued that the trial court should not have divided his lump sum worker’s compensation settlement, which was received one day before he filed for divorce, because the settlement designed to compensate him for lost wages, and wages should not be considered property. The Supreme Court disagreed and held that the settlement was property, regardless of whether it was comprised mainly of the husband’s past wages.

In addition, the fact that the settlement was received one day prior to the filing of the divorce did not prevent the trial court from dividing the asset. A trial court may consider all property acquired by the parties up to the date of the divorce as divisible marital property. The timing of the receipt of the property; i.e. whether it was obtained by the parties midway through the marriage or obtained by the parties a few days before or after the divorce petition was filed is simply one fact among many that a court may consider in making an overall property distribution.

Andrew J. Piela is a Director at Hamblett & Kerrigan, P.A. Mr. Piela concentrates his practice in civil litigation, family law, probate and land use litigation. You can reach Attorney Piela by e-mail at [email protected].