Are Lottery Winnings And Personal Injury Settlements Marital Property In Pennsylvania?
What constitutes marital property is defined by law in Pennsylvania and a judge in a divorce case equitably divides the property between the divorcing spouses. While most types of property are easily to put into the category of marital property, there are others that are not so easily recognized as such. Settlements for personal injury cases, lottery winnings, and other such property that may be paid to one spouse after the spouses are divorced may cause some confusion.
In Pennsylvania, if a spouse’s personal injury claim accrues during the marriage, but the settlement is paid out after a couple is divorced, the settlement award is considered marital property to be divided between the spouses. However, if the actions that form the basis of the personal injury award happened before the couple was married or after they were separated, the award is non-marital property to be kept by the injured spouse alone. This applies to other kinds of awards, including workers’ compensation awards.
Money received from a personal injury that happened before marriage can be transformed into marital property by commingling it with marital funds. A spouse may open and maintain a separate account for those funds to avoid converting them into marital property for purposes of divorce.
With personal injury cases, if the cause of action accrues during the marriage, but the lawsuit related to the cause of action is not filed until after a divorce is finalized, it may still be considered marital property even when the lawsuit is started and settled after the divorce. The main concern is when the cause of action accrued.
In some situations, the spouse of an injured person may also have an independent claim for the injuries sustained by the injured spouse. This independent claim may be for loss of consortium or companionship. As with the primary personal injury claim by the injured spouse, how this award is divided among the spouses depends on when the cause of action accrued. However, because of the nature of the claim, it would almost always be marital property to be equitably distributed by the parties.
Similarly, if a person buys a winning lottery ticket during the marriage but does not receive the winnings until after the divorce is finalized, the lottery winnings are considered marital property. If the ticket was purchased before or after the marriage, it is non-marital property not subject to equitable division.
Spouses can alter these basic rules through premarital and postmarital agreements in which the spouses agree to disclaim their interests in these kinds of property. For instance, the parties could agree that any proceeds from a personal injury lawsuit or from a lottery win are specifically owned by the individual spouse who was injured or who purchased the winning ticket. The agreements may be challenged on various grounds, but generally are enforceable in Pennsylvania.
Contact an Experienced Divorce Attorney
If you are considering filing for divorce and are concerned about what property will be considered marital property by the court, you should contact an experienced divorce attorney. Making assumptions about what property is jointly owned and what property would be deemed non-marital property could affect your rights. For more information and to schedule an appointment, contact an experienced divorce attorney at the Media, Pennsylvania law firm Barbara Flum Stein & Associates serving Delaware County in all family law matters to schedule a consultation.