When it comes to personal injury claims, the question of whether a spouse is entitled to any part of a lawsuit settlement can be a complex issue. A marital asset is a shared property, but is a spouse entitled to any part of a lawsuit settlement?
This is a question that many people who win, or are about to win, a personal injury award think about. The personal injury compensation can be hefty, and having to split your personal injury awards with your spouse is something you might not want to do.
However, the legal bounding for such cases varies from state to state. For instance, in Nevada, as in many other states, the division of assets during a marriage or divorce is influenced by a variety of factors.
This article will explore these factors in detail, focusing on personal injury settlements and how they might be considered marital property or separate property.
Understanding Marital Property and Separate Property
To determine if a spouse is entitled to any part of a lawsuit settlement, it’s essential first to understand the difference between marital property and separate property.
Marital property, also known as community property in some states like Nevada, includes all assets and debts acquired during the marriage. This can encompass everything from real estate to retirement accounts to personal injury settlements, depending on the circumstances.
Separate property, on the other hand, refers to assets acquired before the marriage, inheritances, and gifts specifically given to one spouse. So, if you’re dealing with a personal injury case, you should know the difference between the two.
Marital Property in Nevada
Nevada is a community property state, which means that most assets and debts acquired during the marriage are considered jointly owned by both spouses and are typically divided equally in the event of a divorce.
This includes not just tangible assets like homes and cars but also intangible assets like earnings and benefits. However, personal injury settlements can complicate this straightforward division.
Personal Injury Settlements: Marital or Separate Property?
When it comes to personal injury settlements, whether they are considered marital property or separate property can depend on the nature of the settlement and the timing of the injury.
Personal Injury Settlements Acquired During Marriage
If a personal injury settlement is awarded during the marriage, it may be considered marital property. However, the specific allocation of the settlement can further complicate matters. Personal injury settlements can be broken down into several components, including:
- Medical Expenses: Compensation for medical bills incurred due to the injury.
- Lost Wages: Compensation for income lost as a result of the injury.
- Pain and Suffering: Compensation for physical and emotional distress caused by the injury.
- Property Damage: Compensation for damage to personal property, such as in a car accident.
Each of these components may be treated differently in the context of marital property. For example, compensation for medical expenses and lost wages might be considered marital property. This only works if those expenses and lost wages impacted the marital estate.
On the other hand, compensation for pain and suffering might be considered separate property as it is directly tied to the injured spouse’s personal experience.
Personal Injury Settlements Acquired Before Marriage
If a personal injury settlement is acquired before the marriage, it is generally considered separate property. However, if the settlement is commingled with marital assets, such as being deposited into a joint account, it may become marital property.
This commingling can make it challenging to distinguish between what is marital and what is separate property.
Personal Injury Settlements and Divorce Proceedings
During divorce proceedings, the division of a personal injury settlement can be a contentious issue. The court will consider various factors, including the purpose of the settlement and how it was used during the marriage.
In Nevada, the court aims for an equitable distribution of marital assets. However, this may not always mean a 50/50 split, but rather what is fair under the circumstances.
Factors Influencing the Division of Personal Injury Settlements
Several factors can influence whether a personal injury settlement is considered marital property. It also impacts how it is divided during a divorce. These factors include:
1. Purpose of the Settlement
As mentioned earlier, the purpose of the settlement plays a crucial role. Compensation for medical expenses and lost wages is more likely to be considered marital property. On the other hand, compensation for pain and suffering and personal emotional distress is separate property.
2. Timing of the Settlement
The timing of the settlement relative to the marriage is also critical. Settlements acquired before the marriage are generally separate property. But those acquired during the marriage can be more complex to classify.
3. Commingling of Assets
If the settlement funds are commingled with marital assets, they may lose their status as separate property. For example, depositing settlement funds into a joint account used for household expenses can make those funds marital property.
4. Impact on the Marital Estate
The impact of the injury and subsequent settlement on the marital estate is another consideration. If the injury and settlement significantly affected the couple’s financial situation, the court might consider this when dividing the assets
The Role of a Personal Injury Attorney
A personal injury attorney can assist in several ways, including:
- Evaluating the Settlement: Assessing the components of the settlement and determining which parts may be considered marital or separate property.
- Protecting Your Interests: Advocating for your rights in court and during negotiations to ensure a fair division of assets.
- Providing Legal Advice: Offering guidance on how to handle settlement funds to avoid commingling and protect your separate property.
Common Scenarios and Considerations
Here are some common scenarios and considerations regarding personal injury settlements and marital property:
- Car Accidents: If one spouse receives a settlement for injuries sustained in a car accident during the marriage, the allocation of that settlement can be complex. Medical bills and lost wages might be considered marital property, while pain and suffering compensation might remain separate.
- Workplace Injuries: Compensation for workplace injuries, including lost wages and medical expenses, can be treated as marital property if the injury impacts the family’s financial situation.
- Emotional Distress: Compensation for emotional distress is often considered separate property, as it is tied to the individual’s personal experience and suffering.
Conclusion
In conclusion, whether a spouse is entitled to any part of a lawsuit settlement depends on various factors, including the nature of the settlement, the timing of the injury, and the impact on the marital estate.
In Nevada, as a community property state, the division of assets can be complex, especially when it comes to personal injury settlements.
Navigating these legal complexities requires the expertise of a knowledgeable personal injury attorney who can provide guidance and representation throughout the process.
Find If A Spouse is Entitled to any Part of the Lawsuit Settlement with BLG
If you find yourself in a situation where a personal injury settlement is involved in your marriage or divorce, seeking legal advice is essential to ensure your rights and interests are protected.
At our law firm, we understand the intricacies of personal injury claims and the challenges they can present in the context of marital property.
Our experienced attorneys at Bourassa Law Group are here to help you through every step of the legal process, providing the support and expertise you need to achieve a fair outcome.
Contact us today to schedule a consultation and learn more about how we can assist you.
1-800-870-8910