Some portions of a personal injury settlement are separate property (intended for the injured party‘s pain and personal losses), while other portions, such as compensation for lost wages, can be considered marital assets and thus subject to division in a divorce.
Georgia follows an equitable division rule for property division in divorce proceedings, meaning that each spouse receives a fair share, not necessarily an equal share of marital assets. If you’re separated or going through a divorce while your personal injury case is pending, talk to your Tucker personal injury lawyer about how to structure your settlement so the funds intended for you remain yours.
What parts of a personal injury settlement may be considered separate property?
Personal injury claims are intended to make the plaintiff whole. However, some losses may be considered shared marital losses, such as past lost wages and medical bills already paid from household funds, losses that affected marital assets and income, not just the individual’s.
Damages from a personal injury settlement, typically classified as separate property in a Georgia divorce, include:
- Projected medical bills, ongoing rehabilitation, and income expected to be lost over time (future damages)
- Compensation for pain and suffering, recognizing the hardship beyond what shows up on a bill
- Compensation for scarring and disfigurement, for the permanence of functional limitations or visible scarring
- Loss of consortium and companionship; often, chronic pain or limited abilities negatively impact marital relationships and daily life
Punitive damages, which aren’t available in every case, are also considered separate property. Exemplary damages exist to hold the wrongdoer accountable when their behavior was particularly egregious; while they aren’t awarded in every case, when they are, these funds are exclusively the property of the injured spouse.
When can a personal injury settlement become marital property?
When someone suffers a personal injury, their medical expenses and lost wages affect the household, not just them. So, these portions of the settlement funds can be divided as marital assets, reflecting the losses that both spouses suffered.
If the personal injury settlement is commingled with marital funds, it may be considered divisible in a divorce, including the portions for pain and suffering or punitive damages. Placing the settlement in a shared bank account or using the money to purchase a marital asset, such as a house, often causes the plaintiff to lose any protections the law provides for their settlement.
How are lost wages and medical expenses treated during divorce proceedings?
Past lost wages and medical expenses already paid from household funds are generally treated as marital property in a Georgia divorce. Compensation intended for future medical needs or long-term loss of earning capacity, however, is typically classified as separate property belonging to the injured spouse
What factors can affect whether settlement funds are subject to division?
If the money is allotted to make household funds whole, like money the family would have spent on the injured spouse’s medical bills, or if it’s compensation for what would have been considered marital income, like the unearned wages from the time the injured spouse missed work, then the corresponding settlement funds can reasonably be treated as marital property, subject to division between both spouses.
Why does it matter how a personal injury settlement is classified?
The wording of a personal injury settlement establishes the amounts for each category of compensation. In the divorce process, each spouse’s lawyer may refer back to the written settlement agreement when establishing the value of marital assets. For an injured spouse navigating both a personal injury claim and a divorce, how the settlement is structured and documented before it’s signed can significantly affect how much of it they ultimately keep.
Talk to a Tucker personal injury lawyer about your settlement and legal options
Are you in the middle of a divorce and a personal injury claim? The right legal guidance can help you understand what portions of your settlement are protected and how to structure your claim to preserve them. Contact us online today at (404) 777-7778 for a free consultation.
