Is my wife entitled to any money from a civil settlement if I file right after the settlement?

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Is my wife entitled to any money from a civil settlement if I file right after the settlement?

I am expected to receive a settlement from a workman’s comp case early next year, and plan to file for divorce right after the settlement. Is my wife entitled to anything from this personal injury case during or after the marriage? If she is, can the amount received be gifted to someone else so she cannot have access?

Asked on August 6, 2011 Tennessee

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Your spouse's rights remain the same as if you were in a stable marriage (unless there is a legal separation agreement in effect at the time to the contrary).  That having been said, if a settlement is to compensate for injuries, pain and suffering, loss of enjoyment, or medical bills that do not have any impact on the marital estate, the settlement is separate property and should be fully awarded to the injured person. 

However, that having been said, some state courts have held that a personal injury settlement is marital property in the following situations: if there has been a commingling assets by accepting the entire settlement in 1 check made payable to both parties; if it is compensation for lost wages; and/or any if medical bills that have an impact on the marital estate.  Additionally, when there is a lower settlement amount than what would have otherwise been paid out due to low policy limits or a lack of funds from the responsible party, a court may allocate a portion of the settlement to lost wages even when the settlement indicates that it is for personal injury only.

Since the exact law on this differs from state-to-state, you should consult directly with a divorce attorney in your area.


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