Is a Personal Injury Settlement Divided in a South Carolina Divorce?

As Divorce Attorneys in Charleston, we deal with the division of marital assets. Sometimes couples split up while one of them has a pending claim resulting from an auto accident, workers compensation injury, or some other type of personal injury claim. Other claims may be on the table as well, such as a case for wrongful termination of employment or a case for slander.

They both become interested in whether the non-injured spouse can get a portion of the injured spouse’s award or settlement. The short answer is that they can, but not necessarily in every case. If you would first like to learn a little about how the ENTIRE marital estate is divided in South Carolina family court, start by clicking here.

Are Workers Compensation and Personal Injury Claims Considered Marital Property in South Carolina?

Yes, if the injury occurred during the marriage it is a marital asset just like a house or car that was purchased during the marriage. These claims are considered assets at the time the injury occurs, even before the money comes in. So, an injured spouse can’t delay the settlement of the claim in order to prevent the other spouse from touching it.

Does the South Carolina Family Court Split the Money Equally?

No. It is possible, but it depends on the facts of the case. There have been a handful of South Carolina cases that have analyzed these claims and given some guidance on how they might work.

In one case, the husband and wife were married when they were both college students. The wife quit school and worked to help the husband complete his degree. The husband was injured through his employment and became temporarily totally disabled. It is unclear from the case, but it seems he fully recovered from the injury. His wife cared for him during his recovery, which included a period of being bedridden. The husband received a $16,000 settlement, and the Court awarded half of it to the wife.

In another case, the husband was injured in an auto accident and received a $325,000 settlement. The wife received $10,000 for her loss of consortium claim, which is a claim that compensates a spouse for the loss of spousal services due to the injury. The Supreme Court affirmed the family court judge’s decision to give 20% of the husband’s settlement to the wife and 20% of the wife’s settlement to the husband. However, the court went on to give instructions to family court judges, reminding the judges of the various factors that should be considered in an equitable division. These factors include the contributions of each spouse to the acquisition of the property, earning potential of both spouses, the health – both physical and emotional – of each spouse, and other relevant factors. The Court said that that the proceeds of the award don’t have to be divided so that a portion goes to the non-injured spouse. Instead, according to South Carolina’s Supreme Court, “the family court may, and in many cases probably should award the proceeds entirely to the injured spouse.” The Supreme Court also gave an example of where the family court judge could divide the general marital property equally between the two but award the personal injury compensation solely to the injured spouse.

In a third case, which was “unpublished” so that it can’t be cited in court, the husband received a $78,000 workers compensation award. He invested most of this money in the family business. The family court judge split the marital estate with 60% to the wife and 40% to the husband, and the wife’s portion included the entire family business. The husband appealed and his lawyer argued he should receive a “special equity” in the business based on the money that came from his injury settlement. The Court of Appeals held that he can’t receive special equity when the only thing extra he contributed was worker’s compensation proceeds, which are a marital asset.

It seems that in most cases, the division will not be 50/50. Some major things to consider are how much the spouse contributed to the care of the injured spouse, how long any disability will last, and the severity of the disability. In other words, a spouse who fully heals is more likely to give a portion of the settlement to the spouse than one who lost an arm in a car wreck but was only able to recover $25,000 due to insufficient insurance coverage.

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