Personal injury settlements may be marital property in South Carolina if the injury claim arose during the marriage and is part of the marital estate when divorce or separate support litigation begins. South Carolina courts generally don’t split a settlement into separate parts for pain and suffering or lost income. Instead, the court decides whether the settlement is marital property and then divides the marital estate in a way it finds fair.
This issue often comes up for families going through divorce in Greenville and Easley. If you are in the process of separating from your spouse and worried about whether you will keep your settlement money, a Greenville personal injury lawyer at Smith Jordan Law can help you understand your next steps.
What parts of a personal injury settlement are marital property?
South Carolina divorce laws are unusual compared to other parts of the country. In some states, compensation for pain and suffering or future economic losses goes solely to the injured party, while money for medical bills is considered marital property.
In 1993, the South Carolina Supreme Court set the precedent in Marsh v. Marsh, 437 S.E.2d 34 (1993), for deciding how to divide settlements from personal injury cases during divorce proceedings. The Court examined three ways to divide a personal injury award, including separating different types of compensation as marital and separate property.
Ultimately, the Court decided on a “mechanistic” approach, which doesn’t divide the settlement at all. In SC, all parts of a personal injury settlement, both economic and non-economic damages, are classified as marital property subject to the usual rules of division during divorce. However, individual courts have the ability to decide how to award the property between spouses, depending on various factors.
What parts of a personal injury settlement are separate property?
A personal injury settlement may be separate property if the injury happened before the marriage or after divorce or separate support proceedings began. Even if your settlement comes later, the court will still look at when the injury happened and when the claim began to decide if it is marital property.
How does South Carolina law divide marital property?
Under the SC Code of Laws § 20-3-620, the court divides marital property in an equitable fashion between the parties. This doesn’t always equal a 50/50 split, and the factors impacting how property is subject to division in a divorce include:
- How long you were married
- Whether one or both parties engaged in adultery, abuse, or other grounds that affected the marriage
- Each spouse’s income, earning potential, and current job security
- Each party’s monetary and non-monetary contributions to the marriage
- Child custody and child support arrangements for your children
- Total value of all marital assets, including your personal injury settlement funds
- Total value of all debts and obligations
- Tax consequences for each spouse
- Retirement accounts accumulated during the marriage
- Health and age of each spouse
Part of the process also involves deciding if an asset is marital or separate property. Separate property includes anything you brought into the marriage, that is titled solely in your name, or that you inherited. Your divorce attorney can advise you on which other assets may qualify as separate. Smith Jordan Law does not provide tax advice, but a tax professional can help you understand how these issues may apply to your situation.
How can a personal injury settlement affect divorce in South Carolina?
A personal injury settlement can affect your divorce if the court treats it as marital property. This can seem unfair if you received a personal injury award long after your divorce is final, but the most important factor is the date the injury happened. As long as the injury occurred while you were still married, the court considers the settlement money as marital property.
Suppose you get hurt while you’re in the process of getting a divorce. How does that affect what the court could do? The answer is that it depends on the same circumstances listed above, in addition to any other details related to your injury.
For example, if you lost your arm as a result of the accident, the court may decide to award you the full value of your settlement to compensate for your diminished earning capacity and any future medical expenses. Every case is different, so it helps to talk with a lawyer about how your injury claim and divorce may affect each other.
Get guidance on personal injury settlements and divorce in Greenville
If you have questions about personal injury claims and how your divorce could affect them, contact us online at Smith Jordan Law for a free consultation. We can answer your questions and manage your case, working to maximize your personal injury award from those at fault for your accident. We offer contingency payment programs, so you don’t pay us until we obtain a settlement or jury award for you. Get in touch by calling (864) 343-2222 today.