When a couple decides to divorce, they usually think about which spouse will get the house, who will have custody of the kids, and what the child support payments will amount to. But what about the settlement from a personal injury claim – what happens to that money? The answer to that question is…it depends. To ascertain what happens with money from an injury settlement in the event of a divorce, you must first understand the difference between marital property and personal property.
Division of property in New Jersey
The state of New Jersey is an equitable division state. When divorcing, the judge will divide marital property in a manner that is deemed equitable and fair – but not necessarily equal. Martial property includes all property that is earned or acquired during the course of the marriage, including gifts exchanged between the spouses and any new property that is gained, regardless of whose name is listed on the title.
Separate, personal property is that which is owned prior to the marriage or after one of you files for divorce. Personal property also includes any gifts you received from anyone other than your spouse, and any inheritance received. If the personal property generates income, or if the property increases in value during the marriage, that asset is considered yours alone.
Injury settlements and marital property
The damages awarded in a personal injury settlement are intended to compensate the victim for the injuries they sustained. Damages may be awarded for medical expenses, monetary loss, lost wages, and other types of property loss. For the most part, these monetary damage awards are considered marital property, which will be subject to the laws of equitable division in New Jersey.
Damages may also be awarded for emotional distress, pain and suffering, and loss of consortium. These awards are considered the personal property of the injured spouse, as they indemnify the victim for the pain and suffering they alone experienced as a result of the accident. Damages that are considered personal property are not subject to equitable distribution. Hence, the injured spouse does not need to share the portion of a personal injury settlement that provides compensation for their pain and suffering or mental anguish.
Have questions regarding your personal injury settlement? We can help
Divorce can be complicated enough without adding a personal injury settlement into the mix, and trying to determine how much of the settlement is personal property. Let us help. At Lomurro Law, our experienced legal team includes personal injury attorneys and divorce attorneys. We have represented New Jersey families for more than 130 combined years and have in-depth knowledge of the state’s divorce laws as well as those for personal injury claims. We are available to answer your questions, explain the law, and guide you to the best possible outcome in your situation. Schedule an appointment to meet with a member of our team by contacting our office at 732-482-9285 or online.