Personal Injury Awards and Property Settlement (Family Law)

Property settlements can be complex, especially when the separating couple has a large amount of assets. What happens when one spouse has received a large personal injury payment? Is this considered a ‘contribution’ to the overall property pool or is it treated separately? The Family Law Act 1975 does not provide a mathematical formula for the division of a relationship property pool. The decision of the Courts will depend on each individual circumstance which will have its own unique facts.

The Court of Appeal in a recent Family Court case considered the decision of the trial judge regarding the contribution of a lump sum from an income protection insurer following the wife suffering a stroke. It upheld the decision of the trial judge that the wife receive an adjustment, giving her a total of 53% due to her personal injury payment of $235,152 from a net property pool of $1.8 million.

In deciding that, the Court noted that the insurance payment received by the wife was for total and permanent disability and as a compensation for her not being in a position to receive income for the rest of her working life.

The main reason it was treated as a significant contribution by the wife was because she used that payment to support the family prior to separation. It was treated as a significant contribution by her hence it was considered as matrimonial assets.

The Court also acknowledged that in each individual cases or situations, it is important to consider the personal injuries payment as a contribution.

Once again, noting that each individual circumstance is different from one other. The Court’s decision for a case will likely be different from other similar cases you may heard of. Therefore, it is in your best interest to seek legal advice to determine where would your case stand in Courts.

If you would like to find out more about property settlements or your rights and options, Straits Lawyers are here to help. Simply send us an email at info@straitslawyers.com or give us a call on 8410 9069 to arrange an appointment for an online interview.

Alternatively, if you would like to have a Binding Financial Agreement or Consent Orders drafted, Straits Lawyers are now offering online services at https://straits-lawyers.square.site/product/family-law-binding-financial-agreement-consultation-bfa-/5?cs=true.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.