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Are Personal Injury Settlements Marital Property in Florida?

Separation

If you received a personal injury settlement, and you are about to go through a divorce, it’s understandable you may have questions on what portion of your settlement, if any, your spouse is entitled to. In general, a personal injury settlement is typically not marital property, but there are circumstances that make it subject to asset distribution in a divorce.

Rules vary by state, and Florida is no different. Determining how a personal injury settlement is treated in asset distribution can add another layer of complexity to your divorce. We highly recommend speaking with a knowledgeable Boca Raton divorce attorney who has experience handling these types of situations in a Florida divorce.

Florida is an equitable distribution state, and most funds that are received by a spouse are considered marital property, but there are some exceptions to this rule. It can differ based on the source of the funds, and whether there are any other agreements in place.

Itemized Personal Injury Settlements

If the personal injury award is broken down and itemized, it may be easier to determine how much is marital property. An award for past medical bills would likely be considered marital property, especially if the bills were initially covered by marital funds. The same goes for loss of earnings.

An itemized award for pain and suffering, and future medical expenses and loss of future earnings that occur subsequent to the divorce, would remain separate property. For the non-injured spouse, loss of consortium would likely remain separate property of the non-injured spouse.

Commingling Funds

The biggest risk of having a personal injury settlement declared marital property is when the funds are deposited into your joint marital account. If the funds are deposited and then a portion is used to pay marital debts, it is more likely the court may determine the settlement is now marital property and subject to distribution during your divorce. The court may ask questions about any discussions about the award, the parties’ behaviors, etc. There is a chance that the court will not declare the settlement marital property even if it’s in a joint account. If the money was deposited in your joint account for convenience reasons and the money has primarily been used by the injured spouse, it may not convert to marital property.

Parties need to exercise extreme caution when receiving funds that are considered separate property and then subsequently commingling them. You increase the chances of these funds being declared marital property.

Equitable Distribution 

Florida is an equitable distribution state, not a community property one. Some people assume that a personal injury settlement and any marital assets are divided 50/50. With equitable distribution, marital assets and debts are divided equitably, so that each spouse gets their fair share. The court may award assets in an unequal manner if justification exists. They evaluate a variety of factors, like how long the marriage lasted, contribution of each spouse, economic circumstances, etc.

Retaining a Divorce Attorney

If you have questions about personal injury settlements or any other legal matters regarding divorce in Florida, contact the Law Offices of Schwartz | White at 561-391-9943.

Resource:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0061/Sections/0061.075.html

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