Posted by Nydia Streets of Streets Law in Florida Divorce

Are personal injury settlement funds or awards considered marital property subject to division in a Florida divorce? The answer depends on how the funds are classified. If, for example, a portion or all of the funds are for a spouse’s pain and suffering, this would be considered that spouse’s separate property, not subject to division in a divorce. If, however, the funds are to compensate a spouse for lost wages, medical expenses, lost earning capacity, etc., those funds are generally considered marital property if the expenses and wages were or could have been incurred/due during the marriage. This was an issue in the case Roth v. Roth, 2D19-2559 (Fla.2d DCA March 3, 2021).

The parties were in a long-term marriage by the time a petition for divorce was filed. At issue were personal injury settlement funds from a lawsuit brought by the spouses during the marriage concerning a car accident in which the former husband was injured. At the time of separation, the former wife removed about half of the settlement proceeds from a joint account and moved out of the marital home. The trial court awarded the marital home to the former husband, determined the personal injury funds were the non-marital separate property of the former husband, and denied the former wife’s request for alimony. The former wife appealed.

First addressing the personal injury funds, the appellate court found it was error to classify them as the former husband’s separate property: “Here, the trial court did not make any findings as to the portions of the personal injury award that, based on their purpose, could be classified as marital or nonmarital [internal citation omitted[. But the court cannot be faulted for failing to parse details it did not have; neither party introduced any evidence showing the components of the award. Nevertheless, the funds should not have been classified as the Former Husband's nonmarital funds because the Former Husband did not overcome the statutory presumption that the funds are marital in nature.” The court also found it was error for the trial court to include these funds in the equitable distribution scheme because the funds were spent by the time of trial and neither party had been found to improperly dissipate the money (both appear to have used it on living and litigation expenses).

Next addressing the award of the marital home to the former husband, the appellate court found this to be error where there were no findings addressing this unequal distribution of marital assets. The court also addressed the former wife’s argument that the former husband should not have been awarded credits for mortgage payments made post-separation, holding “That said, however, the court gave no reason for awarding the Former Husband a credit for these payments, and although the testimony at trial established that the Former Wife would help out financially when she could, it generally is inappropriate to award such credits when the paying spouse had been responsible for making those payments all along, on the strength of his or her own income.” The trial court was also found to have committed error when it did not address certain marital debts and it classified a debt incurred by the former husband post-filing as marital.

Last, as to alimony, the appellate court held “The trial court declined to award permanent periodic alimony to the Former Wife, summarily concluding ‘that no form of alimony is appropriate’ after considering the factors listed in section 61.08(2)(a)-(g). The amended final judgment, however, does not include any factual findings regarding need and ability to pay, and the Former Wife argues that those findings are statutorily required. We agree.”

Mistakes can be made in a Florida divorce judgment. This is why it is important to consult with a Miami divorce lawyer to understand the law and how it should apply to your case.