Divorce and Personal Injury Settlement in New Jersey
August 1, 2017
BY: Domhnall O'Cathain
Spouses and NJ Personal Injury Lawsuits
What happens when a spouse has a personal injury lawsuit? What happens to the settlement proceeds that a spouse receives during a marriage for claims arising out of his or her personal injuries? Does that settlement or any part of the proceeds of any such settlement constitutes a marital asset subject to the New Jersey equitable distribution pursuant to N.J.S.A.2A: 34-23? Does it matter if the settlement occurs prior to a divorce or after?
Personal injury claims include the following:
- Pain and Suffering
- Loss of enjoyment of life
- Past and future wages
- Unpaid medical expenses
- Per quod (loss of consortium or services)
In New Jersey, the portion of a personal injury settlement that is intended to compensate for lost earnings and the medical expenses of the injured spouse, is subject to distribution.
However, the remainder of any personal injury settlement which is intended to compensate for personal pain, suffering, and the mental and physical disabilities of the injured spouse or for the loss of consortium or services suffered by the uninjured spouse, are not.
Personal Injury Settlements Are Personal Property
Part of a personal injury settlement or award which represents compensation for pain and suffering and disability is deemed the personal property of the injured spouse only, not subject to distribution because the purpose of the payment is to make the injured person whole, to restore that person to the condition which preceded the injury, to the extent possible by financial means.
The payment attempts to fill a gap or loss in the physical and mental well being of the injured spouse. It does not represent an accumulated asset or acquired marital property. The money from such a settlement represents the legal substitute for pain, suffering, and the mental and physical disabilities endured by the individual spouse, rather than by the spouses jointly.
The key word is “Personal“: Nothing is more personal than pain, mental anguish, and embarrassment because of scarring or disfigurement. Equally personal are the effects of even mild or moderately severe injury. None of these, including the frustrations of diminution or loss of normal body functions or movements, can be sensed, or need they be borne, by anyone but the injured spouse.
Thus a spouse need not share the portion of his or her settlement that was intended to compensate for the pain and suffering he or she endured as a result of his or her personal injuries.
A per quod claim is the logical counterpart of the claim for pain and suffering that accrues to the spouse who is injured. The uninjured spouse has his or her right to an action for loss of consortium.
Allocating the components of an award for settlement that was received prior to the distribution of marital assets pursuant to a divorce will be different from the allocation made after a divorce.
After a divorce, if the divorced spouses cannot agree to a reasonable allocation a matrimonial judge will resolve the dispute
The injured spouse will have the burden of showing what portion of his or her award represents compensation for his or her pain, suffering, and disabilities, and the uninjured spouse will have the burden of showing what portion of the award represents compensation for his or her loss of services and consortium. To the extent that the parties fail to prove that a portion of the award represents their separate property, it shall be classified as a marital asset subject to equitable distribution.
Accordingly keep these principals in mind if you are contemplating a divorce or are in the middle of a divorce and have a separate personal injury lawsuit.
New Jersey Divorce Lawyers and New Jersey Personal Injury Lawyers
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