How Divorce Affects Workers’ Comp Settlements

Filing for divorce and separating from your spouse is never easy. The changes in your daily life can be overwhelming and extremely stressful, but even more so if you or your partner have recently experienced a workplace injury. In fact, it’s not uncommon that divorce is precisely the consequence of such an injury and the mark it leaves on a person and their relationships.

Add to this the issue of a compensation settlement and the whole situation can easily become completely nerve-racking.

How Divorce Affects Workers’ Comp Settlements

Although dividing property that you and your partner have acquired while married might not be that problematic, it’s often unclear what exactly happens to the compensation one of the spouses received in a workman’s compensation settlement. If this is something you’re facing right now, here is some information on how to approach the matter.

Location of the Divorce Matters

Where you live and where you file for divorce can make a significant difference in whether and how the funds received through a workman’s compensation settlement get divided between you and your spouse. For instance, in the USA, most states divide property equitably. This means that, when dividing property in one of these states, a court will take into account a whole range of factors before deciding which party in the divorce receives which share of the assets.

For instance, they’ll look at each spouse’s employment, education, spending habits, and financial needs, to begin with. Nevertheless, this doesn’t mean that the courts in all of these states will handle the distribution identically. The court decisions vary from case to case, but also from one court, county, and state to another.

Unlike the equitable distribution states, the nine community property states divide all assets acquired during a marriage equally between partners. However, even in those states, the court probably won’t divide the full amount of the workers’ compensation equally, but only the part of it that’s actually considered community property. This makes workman’s compensation one of the exceptions to the rule in the community property type of division.

Workers’ Compensation and Community Property

When it comes to workers’ comp and whether it’s considered community property or not, it’s essential to know what this compensation consists of. Namely, when determining the amount that a person will receive as part of a workman’s compensation, one part of the resources is often awarded to reimburse the past medical bills, disability, and lost wages, and another to cover any future medical expenses and wages that a person won’t be able to earn as a result of the work-related injury. It’s therefore vital to hire an experienced workman’s comp attorney since these claims can become more complex than one could expect.

That’s also a good way to protect yourself further, as a good attorney will know if there’s anything in the contract you’re signing that could hurt you down the road, which includes the possibility of getting a divorce and your spouse asking for their share of your compensation. When it’s clear which part of the workers’ comp covers the past expenses, and which the future ones, it’s easier for the court to determine how much of the compensation is community property. Usually, the court will consider community property that is part of the workers’ comp that covers wages, medical, and any other type of expenses that were covered by marital property, and will consequently divide that part equally. They will also take into consideration how much strain was placed on the non-injured spouse.

For instance, they’ll want to know in which ways that spouse was impacted by the injury and whether they had to invest their time, effort, and financial resources into caring for their injured partner. Only after analyzing the situation in great detail will the court decide how much compensation will be given to each party in the divorce.

Timing Isn’t Crucial

Precisely when the injured partner files for the workman’s compensation isn’t as relevant as what it encompasses. Even with that in mind, some cases are still clearer than others. Those who receive their compensation and those who begin receiving their monthly or annual payments of the compensation before the divorce process starts will more easily accept that the major part of the compensation falls under community property.

However, what might trouble them is that things aren’t much different in the cases when the workplace injury case is pending and even when a person files their claim after the divorce is finalized. If the injury was sustained during the marriage, the other spouse’s life was surely disrupted by it. The court will usually recognize that and will divide at least that part of the compensation that covers past treatment expenses and lost wages equally between partners.

If you’re in the process of getting a divorce or this is something you’re contemplating, don’t hesitate to find a respected attorney to represent you and guide you through it. This is especially significant when it comes to cases where there’s a workers’ comp settlement involved as well, which is why you shouldn’t rush into anything without at least consulting a professional.