If you are getting divorced, you may be curious as to whether or not your ex-spouse is entitled to any or possibly all of your personal injury settlement. The answer is not a simple yes or no, and it is important to understand that there are many considerations that the law takes into account when making the decision.
What does the law in Alberta say about personal injury settlements and divorce?
The Family Property Act in Alberta is law which outlines how property held between spouses is to be apportioned during divorce. Under the Family Property Act, Alberta courts ensure that the property and debt acquired during a marriage are split up fairly.
The Family Property Act lists out categories of property which is specifically excluded from division during a divorce. Among these exclusions are the proceeds from a personal injury claim. Most personal injury claims are a result of a car accident.
However, the answer to whether or not the settlement award is actually split up is a little bit more complicated than a simple yes or no. The Courts will consider different factors when determining whether personal injury proceeds are matrimonial property or not, and if they are, which parts of the settlement should be split up.
In order to determine whether or not a personal injury award will be divided, the Courts will look to answer certain questions.
What does the court consider when deciding whether or not your settlement proceeds are up for division?
Of course, when your claim settled is an important detail. For example, if a personal injury settlement is awarded after a divorce is granted, this is generally not considered matrimonial property. But, timing is not the only relevant factor. There are also other elements that the courts will consider.
What kind of award is it?
The first and perhaps most important factors to be considered when the decision to divide a personal injury settlement, is what the personal injury settlement was meant to compensate for.
There are various heads of damage under which a personal injury award can be made, and depending on the way the award is split up, certain portions of the settlement can be up for division in a divorce. For example, general damages are meant to compensate an injured person for their pain and suffering, which is distinctly personal. The same can be said for future earning capacity claims or future income loss claims. However, the past loss of income portion of a settlement might be considered joint property by the Courts, if the income that was lost was during the course of the marriage, for example.
What did you do with the award?
What you do with the settlement proceeds is also important. If you put that money into a joint account with your spouse for example, or used the money to buy joint property, then the award may no longer be excluded from division.
These, and many other factors are used to determine whether or not your personal injury award is separated between you and your spouse. Whether or not these proceeds are excluded is very fact specific. You should be sure to consult with a family or divorce lawyer in order to fully appreciate how your divorce will impact your personal injury settlement proceeds.