Is My Spouse's Personal Injury Lawsuit Considered Marital Property?
(This entry involves Arkansas law. Be sure to check your jurisdiction as laws vary from state to state.)
Many times there is a pending personal injury lawsuit for one of the parties when a divorce is filed. Is the non-injured spouse entitled to any of the money from the personal injury lawsuit?
Arkansas Code Annotated section 9-12-315(b)(6) (Repl. 2009) provides:
b) for the purposes of this section, “marital property” means all property acquired by either spouse subsequent to the marriage except: . . . 6) benefits received or to be received from a workers’ compensation claim, personal injury claim, or social security claim when those benefits are for any degree of permanent disability or future medical expenses.
So the answer is yes unless the money is for permanent disability or future medical expenses.
In Palmer v. Palmer, decided last week by the Arkansas Court of Appeals, this issue was presented to the court. The trial court had to evaluate the findings by the jury that heard the personal injury case. Here's what the Court of Appeals found:
The trial court correctly determined that the FELA proceeds were not marital property as defined under section 9-12-315, and in accordance with Collins, supra. The trial court considered the same evidence that the jury considered in the personal-injury trial by way of the exhibited transcript from that trial. The trial court also considered appellant’s argument that the jury in the FELA case was presented with requests for specific damages for past and future lost wages, past and future pain and suffering, and past medical bills. As recited above, the trial court listed the evidence and testimony, concluded that there was ample evidence to find that appellee was permanently disabled, then found that the entire settlement was for a degree of permanent disability and future medical expenses, and was not marital property. The record before this court demonstrates the depth of the approach and consideration that the trial court employed in reaching its assessment and does not suggest that any mistake has been committed. Accordingly, we affirm.
Moral of the story? Be ready to present ample evidence to the judge at your divorce hearing on what the settlement/jury award money was for (ie. future medical?, disability?, lost wages?, etc.). An examination of these factors ahead of time should give you an indication of what the trial judge is likely to do.