Can My Family Get Compensated for My Car Accident Claim if We Are Going Through a Divorce?

Hossein Berenji, Jan 21, 2022

Being involved in a car accident can be overwhelming, frustrating, and painful. The situation can be even worse if you are going through a divorce at the same time. The divorce action raises issues regarding who has a right to compensation for a car accident when the accident victim is going through a divorce.

The answer to that question depends on several factors. One of the most significant factors is whether the personal injury settlement is considered community or separate property.

California is a Community Property State

States like California and Texas are community property states. The Texas Family Code defines marital property as any property acquired by either spouse during the marriage other than separate property.

Separate property is defined in the code as:

  • A spouse’s assets owned before marriage;
  • Property obtained by a spouse during the marriage as an inheritance, devise, or gift;
  • The compensation for personal injuries sustained by a spouse during the marriage except for compensation for loss of earning capacity.

Spouses have an equal share in community property. Therefore, when you divorce, your spouse is entitled to one-half of all community property.

What are Considered Personal Injuries for a Divorce?

If you were injured in a car accident before your divorce was complete, your spouse could claim one-half of the funds from your personal injury settlement. However, your spouse might not be entitled to one-half of all of your personal injury settlement.

Typically, compensation paid for “personal injury” is considered separate property.

That includes compensation for non-economic damages such as:

  • Emotional distress
  • Physical pain and discomfort
  • Loss of enjoyment of life
  • Mental anguish and trauma
  • Scarring and disfigurement
  • Decrease in quality of life
  • Permanent impairment and disability

A person’s “body” is considered separate property. Therefore, compensation for damages caused by a person’s “pain and suffering” would likely be considered separate property. In that case, your spouse would not be entitled to a portion of the compensation for personal injuries.

Economic Damages for a Car Accident Claim Could be Community Property

On the other hand, the compensation you receive for economic damages could be considered community property. If so, your spouse could claim one-half of the personal injury settlement designated as economic damages.

The question that needs to be addressed is whether the compensation reimburses you for an expense or loss burdening the marital estate. For example, if you used marital funds to pay medical bills, the property settlement portion designated for medical bills would be marital property.

Likewise, if you could not work because of your car accident injuries, your lost wages or diminished earning capacity during your marriage would be community property. All earnings a spouse receives during the marriage are typically included in community property.

Work With Experienced Family Law Attorneys and Car Accident Lawyers

The essential aspect of handling a personal injury settlement during a divorce is to draft the settlement agreement in a way that protects your settlement funds. Compensation that reimburses you for losses that burden the marital estate is subject to community property laws. Therefore, your lawyers need to provide specific amounts for each category of compensation.

For example, suppose you used funds from an inheritance that was separate property to pay medical bills and the cost of personal care. If so, the reimbursement for these expenses would not be marital property. Instead, it compensates you for losses incurred to separate property.

Therefore, your lawyers must explain the compensation you receive for your personal injury case to identify all compensation tied directly to separate property and personal injuries.

Do No Commingle Personal Injury Settlements

When you receive a personal injury settlement, keep the funds in a separate account in your name only. Do not use those funds to pay for or purchase marital items. Co-mingling funds from a personal injury settlement could result in a judge awarding a spouse an interest in those funds because the funds became marital assets instead of separate property.

What Happens to Wrongful Death Actions if the Parties Were Separated?

A surviving spouse can file a wrongful death action under the Wrongful Death Act. Spouses who were separated or going through a divorce can still bring an action if the divorce is not finalized. However, if a spouse finalized the divorce before the person’s death, they do not have standing to file a wrongful death lawsuit.

A divorce action or being separated can complicate a personal injury settlement. Seeking legal advice from an experienced car accident lawyer before accepting a settlement offer can help protect your right to a personal injury settlement.