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Personal injury award not a marital asset

There are times when a catastrophic personal injury and the physical pain, suffering and reduced quality of life takes a toll on a Georgia marriage. Such tragedy may even cause a divorce.

If the personal injury was due to the negligence of a third party, the injured spouse may have made a claim for compensation. If that spouse received a large sum award, which can easily reach into the millions for a very serious injury, the family may have started using that money to maintain their lifestyle. Alternatively, the insured spouse may have invested it. But either way, a substantial asset is cause for consideration when it comes to distribution of assets in a divorce.

So, what happens to that asset, the settlement or award, when the spouses divorce? Is it a marital asset subject to equitable distribution? In Georgia, as per the precedent-setting Campbell v. Campbell case, the non-injured spouse does not get to share in the personal injury compensation paid to the injured spouse, to make that injured spouse “whole.”

Medical expense reimbursement and lost wages may be marital

Rather, the law allocates the personal injury award into marital versus separate parts. Whether any part of the award becomes marital or separate depends on what the award was for. For instance, if the defendant paid $100,000 specifically as part of the award to reimburse the injured party for out-of-pocket medical expenses, but those earlier expense payments came out of marital funds, then that reimbursement award will be subject to equitable division like other marital assets.

The same would be true for lost wages due to the accident. Because spouses’ incomes during the marriage are marital property, so too would be replacement of those wages.

Pain and suffering compensation is separate property

However, the amount of an award directed to cover the injured spouse’s personal pain and suffering and loss of quality of life would be separate property. That amount will not be subject to division and sharing with the uninjured spouse. Similarly, awarding for future expenses, such as medical expenses, would remain with the injured party who will be the only party to incur those future medical expenses. A piece of an award for future lost wages would also remain with the injured spouse.

However, on a different note, a loss of consortium claim by the uninjured spouse would be separate property for that uninjured spouse, since that spouse is the one asserting and establishing such a loss.

Divorcing parties with the kind of high assets that can result from a serious personal injury case will want to give thought to protecting their interests. This protection may occur before the personal injury case settles or may only be addressable at a later date.

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