Is My Spouse Entitled to Half of My Personal Injury Settlement in a Divorce?

 Posted on December 20, 2016 in Divorce

In an Illinois divorce, the general rule is that all property acquired by either spouse during their marriage is considered “marital” property and therefore subject to equitable division. With very limited exceptions, it does not matter how the property was acquired or titled. Unless there is a specific arrangement between the parties (such as a prenuptial agreement), a court will look to when the property was acquired to decide whether it is, in fact, marital property.

Wrongfully Convicted Man Ordered to Share Settlement With Ex-Wife

Sometimes, figuring out “when” certain property was acquired is not obvious. For instance, an Illinois appeals court recently had to decide whether the proceeds of a lawsuit settlement constituted marital property. Normally, any type of personal injury claim that arises during a marriage is considered marital property. In this case, however, the facts giving rise to the lawsuit actually predated the marriage.

The husband and wife in question were married in 2000. At the time, the husband was serving a life sentence in prison. He had been arrested on charges of first-degree murder in 1992 and convicted in a 1993 jury trial.

As it turned out, the husband was innocent. Based on evidence that proved he was not at the scene of the crime, an Illinois appellate court reversed the husband's conviction in 2011 and ordered him released from prison. In 2012, the husband filed a federal civil rights lawsuit against a number of local government officials responsible for his wrongful conviction. This lawsuit resulted in a $20 million settlement.

In 2014, while the husband's federal civil rights lawsuit was still pending, he filed for divorce from his wife. She subsequently argued she was entitled to 50 percent of the proceeds from his civil rights lawsuit. The husband argued the settlement was not marital property since it was based on his wrongful arrest and conviction—events that took place several years before the marriage.

The Illinois First District Appellate Court sided with the wife. The settlement was marital property because the husband's “property interest” did not legally exist until his murder conviction was overturned in 2011, which was during the marriage. Under federal civil rights law, the husband did not have a cause of action until the court reversed his conviction. Even though the events leading to the conviction took place before the marriage, the First District said that had no bearing on when the husband acquired a property interest in his civil rights lawsuit.

An Illinois Divorce Lawyer Can Help

Obviously, most Illinois divorces do not involve one spouse who was wrongfully convicted of murder. But it is not uncommon for one or both spouses to be the beneficiaries of a previous lawsuit settlement, such as insurance proceeds from a car accident. In such situations, it is important to clearly understand the distinction between marital and non-marital property. An experienced DuPage County family law attorney can advise you on how a divorce may affect your rights under a prior or pending civil lawsuit. Contact our offices today to schedule a consultation with a qualified attorney.

Source:

http://www.illinoiscourts.gov/Opinions/AppellateCourt/2016/1stDistrict/1160552.pdf