Are Personal Injury Settlements Considered Marital Property in a South Carolina Divorce?

During your marriage – or perhaps at some point in the separation process – you suffered from an injury from an accident. Now you’re dealing with a divorce and a personal injury case at the same time. You are wondering what will happen if you win your personal injury lawsuit. Will you have to give half of the settlement to your soon to be ex-spouse?

The short answer is – it depends. Learning about the law and hiring a family lawyer to help you with your divorce will help clarify what will happen to you and your settlement.

Dividing Personal Injury Settlements in a Divorce

If you win a personal injury lawsuit, then the economic damages you receive in your settlement can be divided in South Carolina, though not necessarily equally. Your economic damages include compensation for losses such as:

• Medical bills
• A car repair
• Travel expenses
• Lost income

Even if you are separated, your spouse may still have a claim to part of your economic damages. However, noneconomic damages are a different story.

Noneconomic damages include losses for intangibles such as:

• Physical pain-and-suffering
• Mental anguish
• Psychological distress
• Loss of enjoyment
• Disfigurement
• Permanent injury

It would be far more difficult for your spouse to make a case that they should be entitled to any of your noneconomic damages. After all, these are losses that you alone experienced, and although there is the possibility of recovering damages for loss of consortium/loss of companionship (which would apply to a spouse), this category of damages is far less likely to be awarded in a case in which the couple is divorcing.

The issue of noneconomic damages and the division of property in a divorce comes with a cautionary note. If you were to receive your settlement before the divorce is finalized and comingle the money with other marital funds, then it may become part of the marital estate simply because it is too difficult to separate it out.

For example, let’s say you received a $100,000 personal injury settlement and you decided to use these funds to pay off the mortgage on the marital home and the remaining balances on your auto loan and joint credit cards. Seems like a good idea to get rid of these debts, right? Except that once you have paid off joint debts, your settlement money is spent in all that is left in its place is jointly owned (i.e., marital) property.

Along these same lines, you also need to make sure that your personal injury settlement is itemized, so that you know which damages are for economic losses, and which are noneconomic. Settlements are not always broken down this way, so be certain to ask your attorney about this issue and the best way to handle it.

What if I Conceal My Settlement Money from My Ex-Spouse?

As you might guess, it is never advisable to conceal any assets during a divorce, including funds received from a personal injury settlement. Any type of dishonesty during the divorce proceedings will open you up to a perjury charge, the penalties of which could include monetary fines and even the possibility of spending time in jail for contempt of court.

It is also not a good idea to try and delay your personal injury lawsuit so that you get a settlement after your divorce is finalized. You need to show the court that you’re being honest and straightforward throughout the divorce process. Otherwise, they may have a negative perception of you and you might not get what you deserve from the proceeding.

How Marital Assets Are Divided in South Carolina

In South Carolina, marital assets are divided based on equitable division. Unlike community property states where assets are divided equally, the court will decide how the assets are divided based on a number of factors. For instance, the court will examine your marital assets and debts, your future earning potential and the role each of you played in the marriage (i.e. if one spouse worked while the other took care of the kids).

Only the assets that were earned and accumulated during the marriage will count (with a few exceptions). That would your shared home and car. Any debts you accumulated throughout the marriage would also be part of the marital estate.

If you had assets and debts prior to the marriage, such as a home and student loans, these would generally not count towards equitable division, although many married couples put the home into both spouses’ names, which would then make it part of the marital estate.

You may also need to pay your spouse alimony or child support. Again, the court will weigh a number of different factors to decide who gets what and what the agreements will look like.

Your Spouse Might Testify for the Respondent

Another worst-case scenario type of situation when you are seeking compensation in a personal injury claim but also going through a divorce is your spouse testifying for the liable party. The person or party responsible for causing your injuries is not going to want to pay you maximum compensation for your claim. They could be out thousands, tens of thousands, hundreds of thousands of dollars or more depending on how severe your injuries are and the way that your life has been affected by the accident. So, you can expect the liable party to try to do everything possible to avoid compensating you fairly.

The respondent may find out that you are going through a divorce and seek out testimony from your soon to be ex. Or your ex may even reach out to the respondent to testify on their behalf in court. If your spouse testifies or tells the insurance company anything that would minimize the extent of your injuries or weigh in favor of you not being entitled to the compensation you are seeking in your case, it could have an adverse impact on your ability to be awarded maximum compensation.

If you hope to avoid being taken advantage of and further wronged by your spouse and the respondent in your injury case, it is in your best interests to get an experienced personal injury and family law attorney to fight for you in court and with the insurance company. There are many instances in which a spouse will attempt to get as much as possible from their partner’s personal injury settlement. We will work tirelessly to protect your injury settlement and your future.

Contact Mark Nowell Law Firm

If you’ve been involved in a personal injury case as well as a divorce and are looking for a lawyer with extensive knowledge of both areas of the law, the Mark Nowell Law Firm is here to help. Message us online or call our office today at (864) 469-2481 to schedule a free initial consultation.