Is a Personal Injury Settlement a Marital Asset in Florida?

Various categories are involved in personal injury settlements, including lost wages, medical expenses, and emotional harm. In some cases, it may even be possible to receive compensation for the repair or replacement of any property that was involved in the accident. You may also seek additional losses in specific circumstances. A lump-sum settlement is the most common way that personal injury settlements are paid. But in some cases, the settlement may involve structured payments made over months or even years.

Questions about the Award?

If you receive a personal injury settlement, you may be wondering if the funds you receive will be considered marital assets.  If you receive the payout during your marriage the award could be considered marital. Florida is an “equitable distribution” state. This means that assets accumulated during the marriage should be divided equally during a divorce.

Is Award Marital?

Florida, like other states, generally does not consider personal injury awards as marital property. However, there are exceptions to the rule. If you are awarded a personal injury settlement and worry that it may be considered marital assets, pay attention to these exceptions if you want to protect the settlement.  If the award is considered marital your spouse may be entitled to a portion of the award.

Exceptions to the Rule

Generally, personal injury awards are not considered marital property because they are awarded to cover the injury. However, there are situations that can make personal injury settlements subject to property division during a divorce.

Commingled funds

This can happen when the funds are placed in a joint account and used for marital debts and expenses, such as general household expenses and bills. To avoid the money becoming communal funds, keep the funds in a separate account titled only in your name.  You should consider this if you believe that your marriage will ultimately end in divorce. Or if your spouse did not contribute to the household during your injury and recovery. It is a good idea to get legal advice on this issue.

Records are Important

To prevent the courts from viewing your decision to place the funds in a separate account to hide assets during the divorce process, be ready to prove that the funds are being spent for the purpose they were awarded, which is personal injury recovery. Keep a record of how the funds were spent, such as hospital and therapy bills.

Injury Related Expenses

Marital assets were used to pay for injury-related expenses – The process of claiming a personal injury settlement can be a long one. During the legal process, you may need immediate medical treatment and need to pay out of pocket. If marital funds were used to pay for medical services and other injury-related expenses, the amount spent may be taken from the settlement funds and considered marital assets.

Uninjured Spouses Supported the Household

Uninjured spouses supported the household – Personal injury settlements typically include lost wages during the period that the injured party could not work. If the uninjured spouse worked and supported the household, the funds awarded for lost wages may be placed into the marital estate.

Keeping the personal injury compensation separate is the key to protecting your funds from becoming marital assets and subject to division during a divorce. However, you also have to consider whether your spouse supported the household while you recovered from your injury or if marital funds were used to pay for your medical expenses.

Whether you are the injured party or the uninjured spouse who may be entitled to a portion of the personal injury award, you should seek the advice of an experienced divorce lawyer.

Call Debora A. Diaz Esquire at 727-846-1802 to schedule a consultation or use the Scheduling Link: https://deboradiazlawscheduling.as.me/. All consultations are by telephone or video conferencing for efficiency and convenience.

Attorney Diaz practices exclusively in divorce and family law in Florida. Debora A. Diaz is also a Florida Supreme Court Certified Family Mediator.