Proceeds of a Personal Injury Verdict or Settlement in Divorce

If you are considering a divorce, you probably understand that you and your spouse will need to divide your marital propertyduring the process. In an ideal situation, the two of you would be able to reach an agreement on your own. Otherwise the court would be required to intervene and make property division decisions for you.

Illinois is an equitable distribution state which means that the marital estate must be divided equitably between divorcing spouses, not necessarily equally. Equitable distribution is reasonable easy to understand for most types of marital property, such as the value of the marital home and retirement investments but the situation can be much more confusing when dealing with other assets, including the proceeds of a personal injury settlement or verdict.

Timing Matters

In most cases, the divisibility of a personal injury award will depend on when the cause of action arose for the award in question. The Illinois Marriage and Dissolution of Marriage Act provides that—with very few exceptions—property acquired by either spouse during the marriage is considered marital property and is subject to division in divorce. A personal injury case or other civil lawsuit often requires special consideration because of the time that such cases often take. By the time all appeals are completed, a personal injury claim may take several years to reach the point where damages are actually awarded.

Over the years, several cases in Illinois have established that the incident that led to the lawsuit or claim—known as the cause of action—is the deciding factor in whether a personal injury award is marital or non-marital. If a person was injured in a car accident, for example, prior to getting married, any proceeds from the case would be non-marital, even if the injured spouse received payment during the marriage.

Personal Damages

The nature of the award and its intention are also a matter for consideration according to Illinois case law. In one case from 1992, the court was tasked with dividing a $3.4 million verdict between divorcing spouses. The court awarded a disproportional percentage of the award to the injured spouse–$500,000 off the top, plus 75 percent of the remaining award—to ensure that he received the medical care he needed for his permanent injury.

Damages awarded for pain and suffering may also be divided disproportionately depending on the circumstances. Several Illinois appellate court cases have resulted in substantially unequal allocations because only the injured spouse was forced to deal with the pain and suffering. It is important to note that in at least one of these cases, the injured spouse claimed that the pain and suffering award should be considered non-marital. The court, however, rejected this claim, finding the award to be marital but granting a significantly larger portion to the spouse who suffered harm.

Property Division Help

If you are going through a divorce but are party to a pending personal injury lawsuit in which you stand to collect damages, an experienced Orland Park divorce attorney can help you prepare properly. Call 708-518-8200 for a free, no-obligation consultation with a member of our team today.