As you file your personal injury claim in Scottsdale, there are several things you need to keep in mind. For instance, you have to find a reliable personal injury lawyer in Scottsdale to help you file the claim. Your attorney should help you understand what is considered a personal injury in your situation.

Does a personal injury settlement become part of marital property? Whether your personal injury settlement becomes part of your marital property or not depends on several factors, including the laws of the jurisdiction and the context of the settlement.

What Determines the Attachment of Personal Injury Settlement Awards to Marital Property?

You typically won’t need to worry about a personal injury settlement being considered marital property unless you are currently going through a divorce. Here is how the law decides whether or not personal injury settlement funds are marital property:

Laws of Jurisdiction

American states have varying laws that define marital property and how it should be divided. Some states follow community property laws to decide what should be included in marital property, while others use equitable distribution laws.

Community property laws say that any property gained during the marriage becomes community property. This includes any personal injury settlements awarded to you during this period.

In some instances, your personal injury settlement may be considered separate property, meaning that it’s not covered by community property laws. Equitable distribution laws, on the other hand, say that marital property should be split on what is considered fair instead of right down the middle.

Context of the Settlement

Although the law recognizes property gained during the marriage as marital property, sometimes, personal injury settlements aren’t split equally. The court may decide to give the injured party the larger share of the payment, depending on the nature of the settlement.

For instance, if the settlement was for physical and psychological damages caused by an accident or a traumatic event, the court will most likely consider the settlement as separate property. However, if the settlement was for economic damages–like medical expenses or lost wages‒it could be treated as marital property. Compensation for the lost consortium (damages to your spouse who may have suffered a lack of companionship due to your injuries) can also be considered marital property.

Timing

The court will consider the time when you suffered the injuries and when you received the settlement to determine if it’s marital property. If the injuries happened and the compensation was given during your marriage, it’s likely to be treated as marital property.

If you were injured before marriage and were compensated after marriage, the court might consider it separate property.

Use of Reimbursement

How you use the compensation can determine if it’s part of your marital property. For example, if you put your settlement money into a shared account with your spouse or use it for family-related expenses, you might struggle to prove it’s separate property.

Prenuptial and Postnuptial Agreements

Any prenuptial and postnuptial agreements can determine whether or not your settlement money is shared property. These agreements often decide how your marital property–including your personal injury payment–should be split in the event of divorce.

How Divorce Affects Personal Injury Damages

Understanding personal injury awards and divorce in Arizona can seem complex. One of the main issues within Arizona divorce law is community property rules and whether a settlement could be treated as an asset to be shared between former spouses as part of the divorce.

Can a Spouse in Arizona Take an Injury Award During a Divorce?

This depends on many factors, because some personal injury compensation payments might be shared under community property laws. Others can remain separate after divorce, which is why seeking legal advice is important.

How Does the Date of the Injury Influence the Outcome?

Injuries that occurred before a divorce are more likely to be considered communal property. Your attorney will help you determine the best way forward if you believe most or all of an award should be allocated to you during divorce proceedings.

What Should Personal Injury Victims Going Through a Divorce Do?

Gage Mathers recommends speaking to our accomplished trial lawyers. We stand for injury victims and will represent your interests throughout, ensuring you can focus on recovery and your future once your divorce is finalized.

Types of Compensation in Arizona Injury Cases

One of the starting points when deciding how compensation should be divided during a divorce is to define the nature of the personal injury damages awarded, such as:

Medical expenses
Lost wages
Pain and suffering
Punitive damages

While an injury award could be categorized as communal property in a divorce, some compensatory damages may belong to both parties, whereas others may not. For example, compensation for medical bills or lost income may potentially need to be shared in a divorce, but damages for pain and suffering could relate to one spouse and not the other.

Protecting Your Settlement From Being Treated as Communal Property

Dealing with divorce is challenging, and whether you are managing a divorce while pursuing an Arizona injury claim or have already received a settlement, these steps may safeguard your funds:

Clearly defining your personal injury damages, breaking down the settlement into types of compensation
Keeping an injury award in a separate account held in your name, rather than in a joint savings or checking account
Seeking professional guidance to help you understand how the laws apply to you and your former spouse

Taking action quickly may be essential, especially within a complex divorce where there is concern that a former spouse may attempt to claim a portion of an injury settlement to which they are not entitled.

Arizona Alimony and Injury Awards

If there is one spouse entitled to alimony payments or spousal support, this will be managed in accordance with Arizona state rules as part of the divorce proceedings. However, some aspects of a personal injury compensation settlement, such as those related to lost income, could affect the amount Arizona alimony courts award after the divorce is finalized.

The Bottom Line

Always ask your attorney for advice on what to do and the laws around settlement money and marital property. A good personal injury attorney, like those at Gage Mathers, can answer all questions related to your case, including whether to settle out of court or to go to trial.

Curious about how many personal injury cases go to trial? Be sure to read our latest article!

About the Author

Joseph D'Aguanno

Guided by the belief that being a highly skilled specialist in a narrow field is better than being ordinary in everything, Joseph “JD” D’Aguanno leads Arizona’s best personal injury law firm in Phoenix, AZ. Having extensive cross-training in pre-litigation negotiations and trial lawyer skills, with decades of experience, JD strives to provide clients with the most valuable legal services a personal injury lawyer can provide. Under his direction, Gage Mathers Law Group is an award-winning personal injury law firm providing aggressive representation to victims of a car accident, medical malpractice, dog bite, motorcycle accident, and other injurious events. Gage Mathers is trusted by thousands of lawyers and clients throughout the country because of their reputation for getting clients the maximum compensation they deserve.

Years of experience: Over 24 years
Bar number: 020421
Location: Phoenix, AZ
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Personal Injury Awards and Divorce in Arizona: Are Personal Injury Settlements Marital Property?