“Well, I got injured and did all the suffering – it’s my money.”
Wrong!
Sounds simple, should be simple, but so long as we have legislators, judges, attorneys and husbands and wife going through the emotional turmoil of a divorce, nothing is going to stay simple for long.
First we’ll take a brief look at how the property pie has been divided and what those pieces represent. We’ll not be specifically talking about personal property versus real property. Here when we say personal, we’re just talking about the person – the human being.
Separate property is that property that belongs to just one of the spouses. E.g. Six years into a marriage, husband buys a sports car and he’s the only one that drives it, maintains it, calls it his own and even named it “Streak.” Another six years go by and it’s divorce time – too much fun with Streak on Saturday nights. Husband’s separate property, right? Wrong!
Marital property is that property that belongs to both the husband and wife. E.g. A couple gets married – they both have about the same salaries and divide up all living expenses. Included in the wife’s share are all the bills for the house that she had inherited. They share all day to day expenses. He does all his household chores including the yard work. They’re happily married for 20 years and then wife falls in love with the computer tech and its divorce time. The house is marital property, right? Wrong!
Separate property is that which is completely identified to one of the spouses. Such property could be anything that one spouse brought into the marriage that the other spouse never touched, e.g. an investment account held separate from all other marital finances.
Now that you’re confused, we’ll go to dividing up a personal injury settlement. Soon we’ll simplify what at first seems as impossible as feeding water to a rabid pit bull with a fork.
Separate property as to a personal injury award, is that which is purely identifiable to the injured party. Examples of such separate property would be the injured party’s pain and suffering, disability and disfigurement if any.
Separate property in a personal injury award can also be that of the other spouse. How? Something called “loss of consortium” or “loss of companionship.” This is the separate property of the uninjured spouse.
Marital property in a personal injury award would include lost wages, lost earning capacity and all medical related expenses.
The majority of the time these issues never come up. Generally you only have to consider these if the marriage is about to fail – or has failed but divorce isn’t yet filed or final. There are exceptions of course such as if there was a large award of pain and suffering and that award was used in the purchase of a home or some other highly valuable asset.
As a practical safety measure – dealing with the “what ifs” in life – you can ask that the personal injury award be specified as to how much of it is for what kind of damage to the person. And, both the husband and the wife have to agree to the division – and, even further, each need their own attorney to advise them.
Always get your attorney involved – the sooner the better.
A story about seeing your attorney before the problem: A man comes into the attorney with a toothpaste tube with the cap off and asks to have the cap put back on. Another man comes in with a platter with a squished toothpaste tube and toothpaste all over the platter and asks him to put the toothpaste back in the tube. Which one is going to have the lower attorney bill?