Is My Spouse Entitled to My Personal Injury Settlement in Florida?

 

Once a settlement is reached in a personal injury case, many questions can arise. One being:  “Is my spouse entitled to my personal injury settlement in Florida?” While sharing finances with a spouse is common, the situation becomes more complex when the distinction between personal and marital property is unclear. Issues such as ongoing medical expenses, lost wages, or potential divorce proceedings can further complicate matters. Understanding the legal intricacies of spousal entitlement is crucial to safeguarding your financial future and ensuring your settlement fulfills its intended purpose.

 

How Florida Views Personal Injury Settlements

Personal injury settlements in Florida are distinct financial assets with unique legal protections. Unlike standard income or assets acquired during marriage, these settlements are often treated differently, shielding them from classification as marital property.

  1. Compensation for Personal Trauma: Personal injury settlements aim to address personal physical pain and emotional suffering, which are considered separate, non-marital property.
  2. Specificity of Damages: These settlements often include compensation for specific damages, such as pain and suffering or future medical expenses, which Florida law typically treats as separate property.
  3. Future Earning Capacity: Compensation for diminished future earning capacity is generally regarded as non-marital property, as it represents the injured spouse’s individual earning potential.

When is My Spouse Entitled to My Personal Injury Settlement in Florida?

Personal Injury Settlements in Florida: What You Need to Know

Understanding the rules surrounding personal injury settlements in Florida is just the first step. From here, it’s crucial to examine how these settlements are treated in the context of divorce law and equitable distribution, particularly when determining if your spouse has a claim.

Factors That Can Impact Spousal Claims

  1. Lost Wages During the Marriage
    If a portion of your settlement compensates for wages lost during the marriage, that amount may be classified as marital property, as it represents income that would have supported the household.
  2. Injury-Related Expenses Paid with Marital Funds
    When marital funds are used to cover injury-related medical expenses, the corresponding portion of the settlement could be considered a marital asset.
  3. Risk of Commingling Settlement Funds
    While personal injury settlements are generally considered separate property, commingling them with marital assets can change their classification. Examples include:

    • Deposits into Joint Accounts: Placing settlement funds into a joint account may be interpreted as an intent to share the funds as marital property.
    • Home Improvements: Using settlement money for renovations to the family home could reclassify those funds as marital property.
    • Paying Off Joint Debts: Settlement funds used to pay shared debts might also be seen as commingled.
  4. A notable case, Martinez v. Martinez, illustrates how commingling can affect property classification. Seeking advice from a financial advisor can help you structure your settlement to preserve its separate status.
  5. Lack of Proper Documentation
    Clear records are essential to differentiate various components of a settlement. Without proper documentation, all or part of the settlement could be deemed marital property. The injured spouse bears the burden of proving which portions remain separate.
  6. Structured Settlements and Divorce
    Structured settlements, which provide periodic payments, add complexity to property division during a divorce. Payments received during the marriage may be classified as marital property, while future payments are evaluated based on their intended purpose.

Tax Considerations

Most personal injury settlements are not subject to taxation; however, punitive damages and interest may be taxable. Proper management of settlement funds is critical to preserving their status as non-marital property.

Don’t Leave Your Financial Future to Chance

Protecting your financial future shouldn’t be a journey you take alone; our legal team at Barnes Cohen & Sullivan is dedicated to securing the best possible outcomes for you and your unique situation. With the complexities of personal injury settlements and marital property laws in Florida, it’s essential to have expert guidance to navigate the intricacies that could significantly impact your financial well-being.