Timothy F. Rayne, Esquire

During a divorce, determining if an award is or is not marital property is the first step toward equitable distribution

Under Pennsylvania law, a spouse's rights to property are determined by a process called equitable distribution – through which the marital assets are identified and then divided. In some cases, the treatment of a past or pending personal injury claim can be a significant factor. This article explains how particular awards are classified as non-marital or marital property, and how marital awards are divided between the injured and non-injured spouse.

Which Personal Injury Claims Are Not Marital Property?
The proceeds from certain personal injury claims are not marital property. As such, these proceeds are the separate property of the injured party and are not subject to division in equitable distribution. First, the proceeds from a claim for an injury that occurred prior to the marriage are not marital property, even if the proceeds are received during the marriage. However, it is advisable for the injured spouse receiving the award for an injury predating the marriage to keep the funds titled in his or her name, rather than co-mingling them with marital funds. Co-mingling could result in the proceeds being converted to marital property.

Second, the proceeds from any injury occurring after the date of final separation will be considered non-marital property, even if the proceeds are received before the divorce is granted.

Finally, the courts have ruled that the proceeds from an injury occurring during the marriage will be non-marital property if the settlement or court award or verdict occurs after final separation. The courts have reasoned that an enforceable right to recover legally for an injury accrues only upon the actual verdict or settlement and that, before the verdict or settlement, there is only a speculative claim which cannot be valued or divided.

Which Personal Injury Claims Are Marital Property?
The only personal injury claims that are marital property subject to equitable distribution are claims for injuries that occurred during the marriage and before separation and those for which a settlement or a verdict occurred during the marriage and before separation. The courts have noted that such a rule provides an incentive for the injured spouse to hold off settling a claim until after separation to ensure that the proceeds will not be considered marital property.

The Division of Personal Injury Awards
Classifying a personal injury award as marital property is just step one of equitable distribution. If the award is deemed to be marital property, then it must be divided. In dividing the award, the court has broad discretion to divide the award in the equitable (fair) manner it determines is appropriate given the circumstances of each spouse. Those factors include the ages, health, education, training, sources of income of the spouses, and other factors. The court could decide to split the award equally.

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