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Does My Estranged Spouse Share My NY Personal Injury Settlement?


New York Attorneys Helping Divorced Couples with Distribution of Injury Settlements

It goes without saying that divorce is as divisive a situation as one can ever be called upon to endure. During the breakup, it seems that everything is being pulled apart – not just the spousal relationship, but also the relationships that have been built with other married couples. Even in relatively friendly marital splits, the relationship between a parent and child (or children) can become strained.

Then there is the division of property. The family residence, the investment accounts, and the retirement funds: They all have to be accounted for and, in a state such as New York, which follows equitable distribution rules, they must be “equitably” divided. What about a personal injury settlement in New York? Are there special rules that apply to those sorts of recoveries? In a word: “Yes.” Here’s an overview of how New York family law treats settlements and/or civil action verdicts in personal injury cases.

New York General Rule: Only “Marital” Property is Divided Upon Divorce

When it comes to division of property within a divorce, New York is an equitable distribution state. Under equitable distribution rules, most property acquired during the course of a marriage is deemed to be “marital property” and is divided between the parties. New York law treats some property as “separate,” however. It is not so divided. Generally speaking, separate property is property that was acquired before marriage, by inheritance, or by gift.

Special New York Statute Handles Personal Injury Proceeds

By virtue of a special statute, N.Y. Dom. Rel. Law § 236 B (1)(d), compensation for personal injuries received during the course of a marriage are deemed to be the separate property of the injured spouse. Under that law, settlements and awards to compensate the injured party for such costs as medical bills, as well as compensation for pain and suffering and any punitive damages awarded to punish the negligent defendant are deemed to be the injured party’s (plaintiff’s) separate property.

That portion of a personal injury award that is intended or designated to compensate the injured party for lost wages or to compensate him or her for diminished earning capacity is treated as marital property, however, and is subject to equitable distribution rules. If one thinks about it, this is a reasonable rule, since those earnings would have been considered marital property if they had been earned at work.

Personal Injury Settlement Agreements Often Designate the Various Components

Generally, a personal injury settlement will designate how much is being paid for medical bills, how much is considered pain and suffering, and how much is deemed to be in lieu of lost wages. If you have a personal injury claim against a third party, it is important to communicate early on the fact that you may have marital difficulties. While one cannot arbitrarily designate that all of a personal injury settlement is intended to be for pain and suffering – thus avoiding equitable distribution – one can carefully document how the components of the settlement have been determined, increasing the chances that such designations will stand up if later challenged in the divorce proceeding.

Have You Been Injured in an Accident?

If you have been seriously injured in a vehicle crash, you need a strong, resourceful legal advocate to protect your interests. If you have a troubled marriage, you also need an attorney who can protect your settlement to the fullest extent allowed by New York law.

The law firm of Hacker Murphy is one of the most highly respected law firms in upstate New York and the Capital District. Having represented clients for years, we are among the top-rated lawyers in the country, achieving the highest ratings from both client groups and our peers. Once we accept your case, we invest all the time and resources necessary to obtain the largest settlement or award possible. Each case is unique, and a positive outcome is not guaranteed, but we have a very successful record of winning cases for our clients. Contact our attorneys today to learn how we may be able to help you. Call us now at (518) 730-4723 or complete our online form. The Hacker Murphy law firm has an attorney available to assist clients 24 hours a day, seven days a week, 365 days a year – even on holidays.