Sadly, relationship breakdown can be one of the consequences of significant personal injury. Any personal injury award that has been made will be in the “financial pot” to be divided upon divorce. Potentially, a personal injury award can be divided in the same way as any other asset that belongs to the couple, such as the family home.
The recipient of a personal injury award is more likely to be able to retain it where there are other assets sufficient to meet the other spouse’s needs (such as housing).
Where there are insufficient assets to meet both spouse’s needs, the Court will have to balance the needs of both spouses. The injured spouse may have continuing care or treatment costs, or may not be able to earn enough income to meet their outgoings. The other spouse may remain the primary carer of children, and need suitable housing.
In some cases, the Court has awarded that some of the personal injury award can be used to purchase a property for the other spouse whilst the children are young, with the property being sold when the children reach adulthood, and the personal injury award money being returned to the injured spouse at that point, to be used to meet their future needs. This allows both spouses needs to be met at the appropriate times.
Individuals that have received a personal injury award should consider entering into a pre marital agreement (a “pre nup”) before they marry (or a post marital agreement if they are already married when they receive a personal injury award), to protect the award as far as possible in the event of future divorce.
If you would like to discuss the protection of personal injury awards on divorce, please contact Karen Pritchard in our Family team.