Is a Personal Injury Settlement Considered Marital Property?

Any financial property obtained during the marriage can be considered marital property to be divided. However, when it comes to personal injury settlements, it is not always an equal split. The injured party more than likely will be awarded the larger share. It is also dependent upon the actual injuries suffered, whether any injuries are permanent, lost wages, the ability to work, etc.

In the case of Mack v. Mack, 108 Wis. 2d 604, 323 N.W.2d 153 (Ct. App. 1982)[1]​, a man was injured in a motorcycle accident during the marriage, and both parties used the awarded settlement as part of their income. The divorce judgment awarded the husband a larger share based on those factors. The wife, however, was entitled to a portion on the grounds of accumulated finances during the marriage which made the settlement joint marital property.

As discussed in Krebs v Krebs, 148 Wis.2d 51, 435 N.W.2d 240 (1989)[2], the court should presume that the injured party in a personal injury case is entitled to all of the compensation for pain, suffering, bodily injury and future earnings. There should be no division of that property for the non-injured party in the divorce.

Another example is in Wallen v. Wallen 139 Wis.2d 217, 407 N.W.2d 293 (Ct. App. 1987)[3] that a claim for personal injury is property subject to division as long as the personal injury claim is during the marriage and not acquired be either party prior to the marriage.

The easiest way to find out what is eligible to be divided is to meet with a divorce attorney to go over the specifics of your personal injury settlement.

Is a Structured Injury Settlement Divisible?

The courts have full discretion in these matters, so there is no guarantee. Hypothetically, if you're unable to work, the court may consider your need greater than his when it comes to financial support or obligation.

To exemplify, the case of Krebs v. Krebs 148 Wis. 2d 51, 435 N.W.2d 240 (1989) brought this issue to the forefront. In that case, the court had decided to split the structured personal injury settlement. The court granted the wife a greater share at 70%, and the husband 30%. However, the wife appealed. The court of appeals reversed. The supreme court affirmed.

Is My Personal Injury Lawsuit Divisible Even Though It Has yet to Be Settled?

In some cases, depending on the specifics, yes it can be. This is demonstrated in the case of Richardson v. Richardson 139 Wis. 2d 778, 407 N.W.2d 231 (1987)[4].

This case saw a court of appeals reverse a decision that saw to it that, among other factors, any recovery of monies that advanced the lawsuit would be divisible by both parties equally, but, pain & suffering, and the loss of future earnings would be property of the wife alone. The court of appeals, and subsequently the supreme court, found that the entirety of the settlement should be divisible between both parties. This is only an example as to how a similar case played out.

For Immediate help with your family law case or answering any questions please call (262) 221-8123 now!