Is a Personal Injury Settlement Subject to Property Division in FL?

Is a Personal Injury Settlement Subject to Property Division in FL?

Posted By R. Gregory Colvin LLC || 30-Nov-2018

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 marital asset:

  • 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.

At 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.

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