When in the middle of a divorce, you might not know how personal injury affects the divorce. How will personal injury awards become divided between you and your spouse? Here I will discuss personal injury awards and worker’s compensation. I will discuss how divorce impacts these things.
When a married couple decides to divorce, they have to split their property, assets, and debt among them. This happens because married couples generally accumulate these things together throughout the course of their marriage. All property is considered marital or separate property. If it is marital property, this means that each spouse is entitled to a part of it. If it is separate property, only one spouse keeps it. Personal injury awards can constitute either marital property or separate property. It depends on the situation surrounding the injury award.
Courts generally use either the analytic or mechanical approach in these situations. These approaches help determine if the spouses should share the personal injury awards. In some cases this occurs. In others, only one spouse has a right to compensation. The analytic approach gets used in most states in the U.S. This approach uses what the personal injury award replaced as a way to determine who has a right to it.
If the compensation replaces something that both of the spouses lost, the award constitutes marital property. This could include income. However, if the compensation replaces something that only one spouse lost, the award constitutes separate property. This might include loss of a limb. An award is considered separate property if it was meant as compensation for the injured spouse’s well-being. The mechanical approach to personal injury award division is slightly different. The mechanical approach focuses more on the state law’s definition of separate property and marital property.
Separation by State
By law, separate property is considered property that was acquired by one spouse as inheritance or a gift during the marriage. Or, it could constitute property acquired before the marriage took place. Marital property refers to any property acquired during the marriage. The mechanical approach determines that personal injury awards do not fit the definition of separate property. Therefore, they must get divided amongst both spouses.
The division of personal injury awards between spouses that are getting a divorce will vary from state to state. If you live in a state that uses the analytic approach, you might have a better chance of keeping some if not all of the compensation as separate property. However, unless your injury occurred before you got married, the mechanical approach will probably consider the awards as marital property, and it will get split between both spouses. It is important that you review and understand the laws in your own state.
If you got injured on the job, or if you became sick as a result of work, you will probably receive worker’s compensation benefits. Worker’s compensation is a mutually beneficial program. It allows workers to receive compensation for their injuries without filing a lawsuit against their employer. Also, it allows the employer to save money that would go towards defending against costly lawsuit fees. However, sometimes it is difficult to determine who is entitled to your worker’s compensation benefits if you get a divorce.
When the Injury Occurred
Different state courts treat workers compensation in different ways. Some states consider worker’s compensation as a personal injury award, while others treat it as wages. Some states consider it marital property, and some consider it separate property. As a result, your ex spouse’s entitlement to your compensation benefits will depend on the state that you live in and how it views worker’s compensation. If your worker’s compensation benefits get treated as wages, your ex-spouse’s claim to the compensation will depend on when the accident took place. If the injury occurred during your marriage and you started receiving payments during the marriage, the compensation benefits will get treated like marital property. As a result, you will have to share the benefits with your ex.
However, if the injury occurred before or after your marriage, the worker’s compensation constitutes separate property, and you will receive all of it. When worker’s compensation benefits constitute disability pay, compensation received during the marriage gets treated as community property, whereas payments received after the marriage ends will constitute separate property. If your worker’s compensation gets treated as a personal injury award, some parts of the compensation will get considered marital property and some will get considered separate property.
Money that covers medical bills or lost wages during the marriage constitutes marital property. Payments that cover medical costs and wages outside of the marriage, or loss of limb or bodily function constitute separate property. Keep in mind that some states consider all worker’s compensation payments as marital property if the accident occurred during the marriage. As a result, there exist many different situations that you can find yourself in when trying to determine who receives worker’s compensation in a divorce.