How Personal Injury Settlements Are Divided in an IL Divorce

Anyone who suffers an injury caused by negligence or intentional harm may recover monetary damages through a civil lawsuit. Although only one person may sustain such an injury, a spouse can also be entitled to a portion of the final settlement in the event of a divorce

Since Illinois is an “equitable distribution” state, any assets or property acquired during the marriage is considered marital property, which must be divided fairly. On the other hand, separate property belongs solely to only one spouse. 

The following are several ways a spouse can maintain separate property during marriage: 

  • Assets acquired prior to the marriage 

  • Property obtained after legal separation 

  • Gifts or inheritance given to only one spouse 

  • Excluded marital property by mutual agreement 

  • Legal judgments in favor of one spouse 

By definition, personal injury awards would be considered as non-marital property. Yet, Illinois law excludes personal injury settlements, disability benefits, and workers’ compensation benefits from being classified as non-marital property. 

For an injured spouse to keep all the proceeds from a settlement, the accident and injury must occur before the marriage. However, if the uninjured spouse has a “property interest” in the settlement by paying for medical expenses, property damage, lost wages because the injured spouse missed significant time from work or even legal services, then he/she will be given a share of the award. 

Keep in mind, Illinois courts generally grant the injured spouse with a significantly larger portion, especially if they are limited in their ability to work. Judges will consider the age, health, and employability when dividing marital property, which is why the injured party may receive a larger share of the compensation due to a physical or mental disability. 

Lastly, if proceeds from a personal injury settlement have been deposited in a joint account or used to pay marital property such as the family home, this type of activity is known as commingling, when separate property is mixed with marital property. Therefore, commingled funds from a personal injury settlement are considered marital property. 

If you are interested in filing for divorce in Chicago, contact the Law Offices of Jonathan Merel, P.C. today at (312) 487-2795 for a free phone consultation. Serving the Chicagoland area since 2009. 

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