In a lot of cases in California, money or any awards received for a personal injury case is considered as community property if the cause of action occurred during marriage (Fam.C. § 780). However, there are times when PI award may be considered as separate property, such as if the cause of action for the damages occurred after the entry of judgment of dissolution or legal separation, or if the spouses have been living separately when the cause of action arose [Fam.C. § 781(a)]. But if the spouse of the injured person paid for the medical expenses from separate property or community property, that spouse is entitled to reimbursement from the separate property PI award that the injured spouse received [Fam.C. § 781(b)].
Marital property characterization could at times be very complex, especially when it comes to property division and settlement during dissolution or separation. A lawyer who is an expert in Divorce and Family Law could best explain the intricacies of property relations and division, that’s why it is advisable to work with one when undergoing legal separation or divorce.