Personal Injury Payout in Property Settlement – What Can Happen
One spouse suffers a serious injury and receives a large compensation payout – how is it treated in a divorce settlement? It’s not straight forward. A recent case considered a payout of $1.4 million.
The case looked at the treatment of a personal injuries payout received by the husband, among other factors, to determine the final property settlement division.
- The parties were in a relationship for 22 years and had 3 children together, the youngest was 12 at the time of the hearing;
- The husband owned a property when the parties commenced the relationship, and this property was sold and proceeds were used to purchase another property;
- During the relationship, the husband was employed full-time earning a high income of around $300,000 at the end of the relationship;
- The wife was the primary carer for the children and homemaker and had not worked throughout the relationship;
- The youngest child was diagnosed with autism and severe intellectual impairment during the relationship;
- In 2013, after separation, the husband was involved in a serious motorcycle accident and obtained brain trauma. It was found that the husband would be unable to work again;
- The wife became the sole carer for the youngest child. It was likely that the child would never be fully independent and would rely on the wife for the rest of her life;
- The husband received an insurance payout following the accident of about $1.4 million, which was paid to his superannuation account.
In considering the facts of the case, the court determined that the Husband had made the greater financial contributions throughout the relationship, including his initial contribution and the financial contribution of the personal injury payout to his superannuation. The court assessed his contributions to be 75%, and the wife’s 25%.
The court then considered the ‘future needs’ of the parties. The court found that neither party would likely be able to work again, and would need to rely on the amount received from the property settlement to support themselves. The court noted however that the wife would be supporting the youngest child, likely for the remainder of her life. It was also relevant that the husband’s legal costs, amounting to over $150,000, had been paid from some post separation income he had earnt but had now ceased, whereas the wife would need to pay her costs from her entitlement.
On that basis, the wife received an adjustment in her favour of 15%, meaning the overall pool was divided 40% to the wife and 60% to the husband.
The treatment of lump sum payments, including personal injury compensation payouts redundancy payouts and lotto wins, will depend on the circumstances of each case, the timing of events and the relationship as a whole.
It is important that you obtain professional legal advice about your specific circumstances to ensure the best outcome is reached for you and your family. Call us today to arrange your initial fixed-price consultation (07) 3221 4300.