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How Divorce Impacts Your Workers’ Compensation Benefits

How Divorce Impacts Your Workers’ Compensation Benefits

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You slipped from a ladder when painting a huge wall and broke your foot. Your lawyer advised you to sue your employer, and you got worker’s compensation benefits to keep you afloat while you heal.

But now, Susan, whom you’ve known since high school, wants a divorce. While you agree that maybe it’s for the best, a contentious issue emerges: what this divorce means regarding your worker compensation benefits.

Whether you opted for a simple divorce or it’s a contested one, financial issues, especially keeping in mind your circumstance, aren’t a simple “let’s move on from this” matter. That’s why this article’s here: to guide you through the potential impacts of divorce on your workers’ compensation benefits.

Division Of Settlement

Your workers’ compensation benefits can be a substantial asset subject to division before the divorce is finalized. This is especially true in cases where the settlement is considered marital property.

If the injury occurred during the marriage and you received the settlement before the divorce, it may be considered a joint marital asset. However, if the injury occurred after the divorce, the settlement can be regarded as your separate property and not subject to division as a marital asset.

Key to note is that laws can vary by jurisdiction, so it’s always best to consult with a local attorney for the most applicable legal advice.

Ongoing Benefits

Regular disability payments designed to replace income can be considered in determining alimony or spousal support. For instance, if you’re receiving a steady stream of workers’ compensation benefits, your ex-spouse may argue that these payments reduce the need for additional alimony.

On the other hand, you may contend that these benefits are not equivalent to regular wages and are specifically meant to address injury-related needs. Additionally, you may express concern about securing sufficient funds for future medical care, which can be an issue if the benefits are included as marital income.

Determining the handling of ongoing benefits requires a careful examination of both the divorce decree and the workers’ compensation award. This can ensure that your rights are protected while also providing for equitable spousal support.

Legal Complications

Determining whether a workers’ compensation settlement is marital or separate property requires detailed legal analysis. It often hinges on specific state statutes and case law. In some cases, it even hinges on the language used in the workers’ compensation settlement documents.

Disputes may arise when one party argues that certain benefits should not be divisible in the divorce. A good example of such benefits are the specific damages meant to address the injured spouse’s pain and suffering or future earning capacity. This can lead to protracted negotiations or court battles, driving up legal costs and extending the emotional stress of the divorce.

Future Earnings And Medical Care

Future Earnings And Medical Care

Workers’ compensation settlements often include considerations for the injured worker’s earnings and ongoing medical expenses. When a divorce is involved, determining how to handle these future-oriented aspects of the settlement becomes complicated.

During divorce negotiations, lawyers might contend that your ex-spouse, or the spouse without the injury, should not benefit from compensation. This is because future lost earnings or medical costs are personal to you, the injured spouse.

However, if the injury occurred during the marriage and the two of you jointly faced the repercussions, the non-injured spouse may have a legitimate claim to a portion of the compensation.

Establishing a fair allocation requires three things: a forward-looking approach, a deep understanding of both parties’ contributions during the marriage, as well as their anticipated needs post-divorce.

Dependency Changes

Workers’ compensation benefits can include additional allowances for the dependents of the injured worker. However, divorce can significantly alter who qualifies as a dependent. For instance, if you have custody of the children, they may continue to receive the full dependent benefit.

However, in cases of shared custody or where it’s granted to your ex-spouse, the distribution of these dependent benefits may need to be renegotiated or litigated. This can become particularly contentious when the benefits form a substantial part of your family’s income.

Changes in dependency not only require legal intervention but also clear communication with the workers’ compensation insurance carrier to ensure the benefits reflect the new family dynamics.

In Closing

Financial issues in divorce are normal. What really counts is the steps you take to make sure the separation is as amicable as possible. You don’t need to be hurt any further, and neither does your ex-spouse. 

That’s why it’s a great idea to have an attorney who’s an expert on these issues to take you through the situation. Keep these tips in hand as you plan your life your life post-divorce, ensuring your workers’ compensation benefits continue to serve your best interests.

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