At some point, you may have suffered an injury due to the negligent actions of another party. It might have occurred at work, at a public place, or because of an automobile accident. After successful litigation of your case, you attain a settlement for your damages. But with a divorce looming, you might wonder if the divorce will cost you some of that settlement.

Divorces split up marital property between the spouses. Some forms of property qualify as separate property which you will keep and not share with your spouse. So if a personal injury settlement is separate property, you will not have to divide it in your divorce settlement.

Settlement money and separate property

As FindLaw explains, assets you attain from a personal injury case can qualify as separate property. However, the settlement money must be money you personally acquire from a case. Some of the injury settlement may compensate you for lost wages. A court may also award part of the settlement to your spouse for a loss of consortium claim. Under these circumstances, your spouse would likely have a claim to part of the settlement.

Commingling an injury settlement

However, like any form of separate property, settlement money must remain isolated from marital property. Depositing your settlement money into a back account you own with your spouse will commingle your settlement money with marital assets and cause your settlement money to lose its separate property status. You may commingle your settlement money in other ways, like using it to pay off marital debt.

How exactly an injury settlement qualifies as separate property depends on the circumstances of how a court had awarded it or how you or your legal team had negotiated the original settlement. Still, keeping your settlement money separate from anything you own with your spouse may give it the best chance of remaining undivided in a divorce.