If I Get Divorced, Can My Spouse Take Part of My Personal Injury Settlement?
Generally, the answer is no, but it depends on what portion of the settlement is being discussed. Texas is a community property state, which means that, by default, most property or income acquired during a marriage is considered community property and is subject to division if a divorce occurs. However, Texas law specifically identifies certain types of property as separate property, and separate property cannot be divided in a divorce.
Separate property includes three main categories:
Property owned before the marriage
Property acquired during marriage by gift, devise, or descent (inheritance)
Recovery for personal injuries sustained during the marriage, except for any recovery for loss of earning capacity during the marriage
This third category is where personal injury settlements are treated differently. Most components of a settlement—such as medical bills, pain and suffering, impairment, disfigurement, and mental anguish—are considered separate property and belong solely to the injured spouse. However, any portion of the settlement that represents lost earning capacity during the marriage is treated as community property, since it replaces income that would have supported both spouses.
Additionally, if the injury or settlement occurred before the marriage, the entire recovery is generally considered separate property.
For example, imagine a spouse is injured in a car accident during the marriage and receives a settlement of $500,000. If $400,000 of that settlement compensates for pain, suffering, and medical expenses, it remains that spouse’s separate property and cannot be divided in a divorce. However, if $100,000 is allocated for lost earning capacity for future work, that portion is considered community property and may be divided by the court.
