Dividing a Personal Injury Award Comes Before Determining Alimony
In a divorce action the court is required to determine how to divide the spouses’ property and whether alimony should be awarded. Property division comes first. See Batty v. Batty, 153 P.3d 827, 829 (Utah Ct. App. 2006) (citing Burt v. Burt, 799 P.2d 1166, 1170 n.3 (Utah Ct. App. 1990) (As a matter of routine, an equitable property division must be accomplished prior to undertaking the alimony determination.); see also Burt v. Burt, 799 P.2d 1166, 1170 n.3 (Utah Ct. App. 1990) ( Proper distribution of property interests of one sort or another should have come first, and only then would alimony need to be considered.).
Specifically, the court should first properly categorize the parties’ property as part of the marital estate or as the separate property of one or the other. Each party is presumed to be entitled to all of his or her separate property and fifty percent of the marital property. But rather than simply enter such a decree, the court should then consider the existence of exceptional circumstances and, if any be shown, proceed to effect an equitable distribution in light of those circumstances…That having been done, the final step is to consider whether, following appropriate division of the property, one party or the other is entitled to alimony. Burt, 799 P.2d at 1172.
In Utah, the purpose of divorce is to end marriage and allow the parties to make as much of a clean break from each other as is reasonably possible. Gardner v. Gardner, 748 P.2d 1076, 1079 (Utah 1988). Thus, courts have awarded, as often as possible, whole assets to each party in a divorce action. Courts must distribute the parties’ assets equitably. An equitable distribution of marital property does not require strict mathematical equality.” Trubetzkoy v. Trubetzkoy, 2009 UT App. 77, ¶24, 205 P.3d 891; see also Teece v. Teece, 715 P.2d 106, 107 (Utah 1986). Thus, in dividing a personal injury award, the court must determine (1) whether it constitute’s one party’s separate property and (2) whether if it is joint property how it should be divided.
What Part of a Personal Injury Award is Separate Property?
Because of the personal nature of special damages, amounts received as compensation for pain, suffering, disfigurement, disability, or other personal debilitation are generally found to be the personal property of the injured spouse in divorce actions. See Izatt v. Izatt, 627 P.2d 49, 51 (Utah 1981). Likewise, money realized as compensation for lost wages and medical expenses, which diminish the marital estate, are considered to be marital property. See Bugh v. Bugh, 125 Ariz. 190, 608 P.2d 329, 331 (1980). Dahl v. Dahl, 2015 UT 23 (UT Sup Ct).
Thus, in order to determine what part of a personal injury award belongs to who, there must be a determination of how much of the award constitutes lost wages and medical expenses. Everything else should go to the injured spouse.