Obviously, awards for personal injury damages need to be divided, or at least dealt with at the time of divorce. The way this occurs differs from state to state. In some states, the damages are viewed as separate or nonmarital property. In these cases, all of the damage award goes to the injured party. The reasoning is that the injury was suffered by only one spouse and the damage award was designed to make the injured spouse whole. Consequently, all of the damage award belongs to the injured spouse.
This is complicated in cases where there are two damage awards: one for the spouse who was injured and another for the spouse of the injured party, to compensate that spouse for loss of companionship (as well as physical help, sexual relations, etc) that resulted from the injury. In the event that the state treats damage awards as separate or nonmarital property, each spouse is entitled to his or her own damage award, but they have no claims to any portion of their partner's award.
Some states, on the other hand, view damage awards as marital or community property, which means the court can divide the award between the husband and wife. In these states, the courts reason that the damage award came about due to something that occurred during the marriage and was going to benefit the entire family. Consequently, the award should be treated as marital property. While in most cases, most of the damage award will go to the injured party, the court does have the right and authority to allocate some of the award to the other spouse.
There are states that fall somewhere between these two extremes by making their decisions based on the type of damage award. A considerable number of personal injury damage awards are divided into parts. Payment may go to the injured party or to the parties jointly, depending on what type of damage award is given. For example, payments for medical expenses usually go to the party that pays the medical bills; payments for pain and suffering usually go to the injured party; payments for lost wages may go to both parties, because the wages would have benefited them both.