Personal Injury Awards

One of the types of property the couple sometimes needs to divide is a personal injury damage award. If, for example, the husband or wife was involved in an auto accident for which someone else was at fault, the party who was injured might receive (or be entitled to receive in the future) a sum of money for the damages. When the couple divorces, the question arises, who is entitled to the damage award?

States take different approaches to the issue. Some states view the award as separate or nonmarital property. Courts in those states reason that only only one spouse suffered the injury, and the damage award was designed to make the injured spouse whole. Thus, the entire damage award belongs to the injured party.

In some personal injury lawsuits, there are two damage awards: one for the spouse who received the physical injury and another damage award for the spouse of the injured party to compensate that spouse for loss of companionship or consortium that resulted from the injury. (Loss of consortium refers to loss of sexual relations and, under some definitions, loss of general companionship.) If a state treated damage awards as separate or nonmarital property, each spouse would be entitled to his or her own damage award, but they would not be entitled to any portion of their partner’s award.

Other states treat damage awards as marital or community property, which means the court can divide the award between the husband and wife. Courts in these states reason that the damage award arose from something that occurred during the marriage and was going to benefit the entire family; therefore, the award should be treated as marital property. In practice, courts in these states are likely to give more of the damage award to the injured party, but the court has the power to allocate some of the award to the other spouse.

Some states take a mid-ground approach that focuses on the type of damage award. Many personal injury damage awards (particularly those set by a judge or jury) are divided into parts. Depending on what type of damage award is given, the payment may go to the injured party or to the parties jointly. Payments for medical expenses are likely to go to whichever party will pay the medical bills; payments for pain and suffering are likely to go to the injured party who experienced the pain and suffering; and payments for lost wages may go to both parties since the wages would have benefited them both.