When it comes to property division in Florida, all marital property is
divided between the spouses. Marital property is considered assets that
have been accumulated over the course of the marriage. However, what happens
when one spouse recovers a personal injury settlement during the marriage?
According to state law, personal injury awards are considered a separate
asset, so it is not subject to property division during a
divorce. However, there are a few exceptions which make it possible for such a
settlement to be divided.
The following are the exceptions when personal injury compensation is a
The settlement was itemized – When an award is itemized and a specific portion covers the injured
spouse’s lost wages, this compensation is subject to property division
in a divorce since income earned during a marriage is considered marital
property. When an injured spouse suffers an injury severe enough to miss
work, the inability to earn income negatively affects the couple.
Marital funds covered medical expenses – If marital funds were used to pay the initial medical bills prior
to reaching a settlement, then the court may award money to compensate
the marital estate for such a payment. For instance, if an injured spouse
pays for medical expenses from a joint checking account belonging to the
couple, the compensation for the medical bills in the personal injury
settlement belongs to the joint account.
Commingling of funds – If the personal injury settlement is deposited in a joint checking
account and/or used to pay marital expenses, the court may find difficulties
in determining which amount of the account belongs to the marital funds
or personal injury award.
Property division in Florida can be quite complicated, especially when
it comes to personal injury awards. The injured spouse will most likely
claim the entire settlement is not marital property, while the non-injured
spouse will attempt to obtain a portion of the award due to lost income
or loss of consortium, resulting in a hotly contested legal battle.
In regard to commingled funds, one or both parties may try to discern which
funds belong to the settlement and which funds are considered marital
property. Despite the fact that this can be a costly and time-consuming
undertaking, tracing the source of the marital funds can benefit the injured spouse.
R. Gregory Colvin, our Orlando divorce attorney is committed to helping our clients obtain
the most favorable results possible. We can help you determine marital
and separate property, sometimes with the help of professional experts
to trace the origins of funds.
For more information,
contact us and schedule a consultation today.