What You Need To Know About Divorce and Personal Injury Awards

Occasionally couples are faced with dividing a personal injury damage award. If, for example, the husband or wife were involved in an auto accident for which someone else was at fault, the injured party might receive (or be entitled to receive in the future) a sum of money for the damages. When the couple divorces, who is entitled to the damage award? 

States take different approaches to the issue. Some states view the award as separate or non-marital property. Thus, all of the damage awards belong to the injured party. In those states, courts reason that only one spouse suffered the injury, and the damage award was designed to make the injured spouse whole. Therefore, all of the damage awards belong to the injured spouse. 

In some personal injury lawsuits, there are two damage awards: one for the spouse who received the physical injury and another damage award for the spouse of the injured party to compensate that spouse for loss of companionship, or consortium, that resulted from the injury. (Loss of consortium refers to a loss of sexual relations and, under some definitions, the term also refers to a loss of general companionship.) If a state treated damage awards as separate or non-marital property, each spouse would be entitled to their own damage award, but they would not be entitled to any portion of their partner’s award. 

Other states treat damage awards as marital or community property, which means the court can divide the husband and wife’s award. In these states, courts reason that the damage award arose from something that occurred during the marriage and benefited the entire family; therefore, the award should be treated as marital property. In practice, courts in these states are likely to give more of the damage award to the injured party, but the court has the power to allocate some of the awards to the other spouse.

In other states, there is a mid-ground approach that focuses on the type of damage award. Many personal injury damage awards (particularly those set by a judge or jury) are divided into parts. Depending on what type of damage award is given, the payment may go to the injured party or the parties jointly. Payments for medical expenses are likely to go to whichever party will pay the medical bills; payments for pain and suffering are likely to go to the injured party who experienced the pain and suffering, and payments for lost wages may go to both parties since the wages would have benefited them both. 

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