Do You Owe Your Divorcing Spouse Half Of Your Worker's Compensation Settlement?

Posted on

If you have been injured on your job, it can put a real strain on your marriage. Not only are you faced with having to deal with your injuries, medical treatment, mood-changing medications and more, but an injury can also often place a financial strain on your marriage. Unfortunately, some spouses are not willing to stay through thick and thin, or care for you while you are incapacitated. But if they leave prior to you receiving your worker's compensation settlement, will they be entitled to a percentage of it for the pain and suffering that the injury put them through? Every case is different, but the answer may depend on how your state handles equitable distribution.

Understanding Equitable Distribution

If you or your spouse cannot agree on how to divide your marital estate, the court will have to step in and make the decision for you. This is referred to as equitable distribution. While there are variances in the way this is handled from state to state, this is the formula that is followed by forty-one states. The other nine are community property states. These include:

Although many people believe that equitable distribution is the fifty/fifty split of assets when a marriage dissolves, this is not correct. Equitable distribution is a flexible system that attempts to split assets fairly. It takes into consideration many different factors, some of which can be quite subjective. For example in Pennsylvania, which is an equitable distribution state, some of these are as follows:

How Equitable Distribution Affects Your Worker's Compensation Settlement

When you are awarded a worker's compensation settlement, you may receive funds that are designed for several different things. Some fees may be earmarked to reimburse you for lost income, while other funds may be compensating you for medical expenses. Your settlement may also include funds that are designed for future lost income or future medical expenses. What your settlement funds are earmarked for will have a direct bearing on whether or not your spouse will have any right to ask for a portion of them.

For example, the funds that are designated as income that you would have been entitled to during the time that you were married could be viewed as marital property. On the other hand, it is highly unlikely that funds that are designed to cover your future medical expenses would come into play. These funds may be considered to be your separate property, but again this may be at the discretion of the court or judge that is making the decision. If you're unsure how your workers compensation funds are distributed, contact your workers comp attorney for information.

Another key issue will also be when you received the settlement. If you receive your settlement while you are still married, the court may view this as marital property, and you may have the burden of proof to show why your spouse should not receive a portion. But if you receive your settlement after you are legally separated or even divorced, your spouse may have to show why they should still be entitled to a portion of it. 

If you live in an equitable distribution state, the best thing that you can do is to hire a good divorce attorney that is well versed in dealing with these types of issues. They will have the knowledge and experience to give you the best advice and hopefully keep the majority of your settlement money.