Washington State Personal Injury Award As Community Property

Family Law Attorneys Working with Divorcing Couples to Divide Community Property between Washington

The dissolution of a marriage in the state of Washington generally presents the spouses with a host of important, and often emotional, issues. Division of marital assets can be quite contentious, particularly if money issues are one of the reasons for matrimonial discord. Where the couple has argued over money for some time, they likely will continue to do so as they seek to work out a division of their assets and liabilities. Where agreement is not possible, Washington courts have to step in between the couple and order an appropriate division.

How does Washington, a community property state, treat a spouse’s personal injury award? The answer is one that we hear to a lot of legal questions: “It depends.”

Beginning Point: Property “Acquired” By Either Spouse After Marriage is Usually Community Property

In Washington, with certain exceptions, any property “acquired” after marriage by either spouse is community property and, therefore, is subject to division by the court. Property acquired by either spouse prior to marriage or by either spouse after the marriage by gift, devise, or inheritance is generally determined to be separate property.

At first blush, the entire proceeds of a personal injury settlement or award received after marriage would, therefore, appear to be community property. For many years, beginning with the state Supreme Court’s 1898 decision in Hawkins v. Front St. Cable Ry., Washington courts said as much. But, in 1984, the Supreme Court of Washington overruled Hawkins [see In re Marriage of Brown, 100 Wn.2d 729, 675 P.2d 1207 (1984)].

Concentrating on the legal meaning of “acquired,” it said the word “should be construed to encompass wages and other property acquired through the toil, talent, or other productive faculty of either spouse, but not compensation for personal injury.” The Court added that damages for physical injury and pain and suffering should have been characterized as separate property.

The Brown Rule

Since Brown, the law, in a nutshell, is as follows:

• Damages for pain and suffering are separate property
• Damages for injury-related expenses (e.g., medical expenses) and to compensate for lost wages and earning capacity are community property

Appropriate Allocation In Personal Injury Settlement Documents

When a spouse’s personal injury claim actually goes to trial, the court or jury will – in virtually every case – make separate findings as to the measure of damages. For example, the jury will determine the number of damages the plaintiff should receive for pain and suffering. It will make similar findings regarding injury-related expenses and lost wages. In nearly every marriage dissolution, the divorce court will abide by the other court’s findings.

Most personal injury claims are settled, however. They never go to trial. In those cases, it is advisable to include a provision segregating the settlement amount into amounts allocated for pain and suffering, for lost wages, and the like. One can see that if the injured party sees a potential marriage dissolution on the horizon, he or she may want to designate as much of the settlement as possible to pain and suffering. Bear in mind, however, that a court can disregard the agreed upon “division” of personal injury settlement proceeds if it finds the segregation was not reasonable.

Skilled, Experienced Legal Counsel is a Must

The issues surrounding a personal injury claim can be complex. Those that deal with marriage dissolution and property division can be burdensome as well. Bolan Law Group. has more than 30 years of combined experience providing quality legal services to individuals throughout the Pacific Northwest. Our firm handles cases in a collaborative environment – attorneys working together to find solutions. You benefit from the experience of not just one attorney, but all the attorneys at Blado Kiger Bolan. We don’t believe in complicating matters and driving up costs. If there’s a simple solution, that’s our first choice. We work closely with you to resolve matters quickly and economically. Contact us on the web, or call our office at (253) 470-2356 today.