What happens to your money from a personal injury settlement when you divorce?

Dollars. Some piece of money over green background.

If a husband or wife were awarded a settlement from a personal injury claim then there are many factors that depend on how it will be distributed in the divorce. Oregon is an equitable distribution state but that doesn’t necessarily mean the award will be split equally in half. It also depends on how the money was allocated from the award or settlement and the date of the accident. How the money is divided up depends on the court’s approach and the analysis based on your specific case.

How the personal injury settlement is treated with the divorce is heavily based on the facts of the claim. Whether it was from a medical malpractice claim or from a car accident, those scenarios can be quite different. One of the aspects considered includes what the damages themselves were. Whether the damages were for pain and suffering, lost wages, loss of championship or property, there are different approaches to separating them as marital or non-marital assets. The court may look at treating the settlement as personal and belonging only to the individual injured, not to be divided. Other courts may analyze the case by separating each element of the damages and seeing if it would be marital or non-marital. Lastly, some courts may look at the personal injury award as a marital asset because it happened during the marriage and therefore should be split evenly.

To protect your personal injury settlement from your divorce make sure to distinguish what damages are personal versus marital. Talk to your personal injury attorney if you believe divorce may be likely after the settlement for your claim has been reached. Keep your award in an individual bank account and do not co-mingle the assets until issues of equitable distribution are resolved.