Newmarket and Ely Living Oct - Nov 2021

ADVERTISING FEATURE
What happens to
a personal injury
settlement if you get
divorced?
By Daniel Sims, Solicitor,
Family Law Department...
The bottom line is that the answer may
not be quite what you expect and, sadly,
changes in family circumstances quite
often follow on from someone suffering a
serious injury.
Most people are aware that spouses
have financial claims against the other’s
income, property, savings and pensions
and, if no agreement can be reached
as part of Divorce negotiations, a Court
may have to make an Order, which could
include selling the property and dividing
up the savings and pension funds.
It would be natural to assume that if
one spouse has received personal injury
damages or compensation after being
injured at work or in a traffic collision, that
money would be ‘ringfenced’ for them
to keep. This is not always the case,
particularly if it is not easy to identify
how much of the compensation remains.
For example, it can be particularly
complicated if it has been ‘invested’ in
the family home and is not simply sitting
in a bank account.
Some proportion of the personal injury
settlement may be compensation for
loss of income or pension benefit. As
the uninjured spouse might have a claim
on the income or pension in ‘normal’
circumstances, so they may have a claim
for a share of the compensation which
has been paid to replace this.
If the family assets are very limited, and
there are children to look after, the Court
may have to ‘dip in’ to the compensation
if ringfencing it would mean the uninjured
spouse could not pay for housing.
However, if there’s a proportion of
the settlement which represents
compensation for pain and suffering, this
may be kept by the injured spouse.
The Court will also need to think about
the injured spouse’s future earning
capacity – if they are not able to carry
on working full-time until retirement age,
they may need to keep the compensation
to pay rent or mortgage, whilst the
uninjured spouse may be able to work to
support themselves.
Negotiating a financial settlement on
divorce can be complicated, with the
Court having to consider factors such
as family dynamics – including child
rearing responsibilities – and different
types of assets. If compensation has
been received before marriage, it may
be prudent to consider entering into a
Pre-Nuptial Agreement, which might look
to ‘ringfence’ the money, and protect it,
just in case the marriage breaks down in
the future.
Fraser Dawbarns have friendly and
experienced lawyers who can offer advice
on divorce and financial settlement in
King’s Lynn, Wisbech, Downham Market,
March and Ely.
Contact us today at any of our offices
if we could help you –
01353 383483
info@fraserdawbarns.com
This article aims to supply general information,
but it is not intended to constitute advice. Every
effort is made to ensure that the law referred to
is correct at the date of publication and to avoid
any statement which may mislead. However,
no duty of care is assumed to any person and
no liability is accepted for any omission or
inaccuracy. Always seek advice specific to your
own circumstances. Fraser Dawbarns LLP are
always happy to provide such advice.
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