Personal injury and divorce are two of the most overwhelming and upsetting experiences that could happen to a person. Unfortunately, studies have shown that there is a correlation between these two devastating events. The likelihood of a married couple separating and getting a divorce after one of them gets injured is higher than the national average, especially when the injured individual sustained a Traumatic Brain Injury or TBI.
The matter of dividing a couple’s assets during a divorce can be a very complicated process that needs the skills of attorneys with expertise in family law; if you add in personal injury settlement into the mix, then the separation and divorce procedure gets murkier. Ultimately, the process of dividing of a couple’s assets after a divorce, including personal injury settlements, will depend on whether you live in a common law property state or a community property state.
Majority of the states are common law property states. Common law means that any property acquired by one member of a married couple belongs solely to that person unless they bought property and put in the name of their spouse as co-owner. In the instance that the couple has both of their names on the title of the property, each of them owns half of the said asset. For example, a wife has bought a piece of land and put only her name on the land title, then that land belongs only to her. If the wife has added her name and her husband’s name on the land title as the owners, then the piece of land belongs to the both them.
Louisiana, Arizona, Texas, Washington, Idaho, Nevada, New Mexico, Wisconsin, and California are common property states. In common property states, all the assets acquired by any member of the couple during their marriage are considered to be “community property,” meaning that the couple owns these assets equally (50/50). Community property includes salaries and wages; property bought using the money the couple has accumulated during their marriage and all debts that they have incurred while married. Assets that a couple has before marriage is considered as separate property unless they turn it into community property by adding their spouse to titles and deeds or by commingling funds.
Since California is a common property state, then any settlement received by the injured spouse will be community property and therefore half of which will go to the non-injured spouse in the case of divorce unless an exception applies. What if the settlement is received after the divorce? Well, if the injury occurred during the marriage, the non-injured spouse will still get half of the settlement since the California Family Code Section 780 states that damages that may be awarded in the future are still community property so long as the cause of action for the settlement happened during the marriage.
Some of the exceptions for community property in cases of personal injury settlements are as follows:
1. If the injury were sustained outside of the marriage, meaning that the couple has been living separately when the injury occurred, then the non-injured spouse would not be entitled to any of the settlement money.
2. California Family Code Section 2603 subsection (b) states that community property that came from personal injury settlement should go to the injured spouse. This section contradicts Section 780, but what Section 2603 is trying to articulate is that the injured spouse should receive the settlement and the non-injured spouse should receive another property from the community property estate. However, if the only community property owned by the couple is the personal injury settlement, then the non-injured spouse will be able to take nothing.
It’s best to consult with an expert divorce attorney to handle matters of property separation, especially when it involves personal injury damages.
Sustained a personal injury? Contact us at Hogan Injury for expert legal advice.
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