Divorce & Work Injury Benefits
Has your spouse been awarded money from an accident or work related injury? If so, you may be asking yourself if this award is considered “community” property and if it would be equally divided after a divorce. Any earnings gained by either spouse could be considered community property. Therefore, income earned from a personal injury or work related injury should be decided by the court.
Divorce courts in Nevada typically consider benefits from worker’s compensation as replacement of wages. Thus, payments received while you are married are considered to be community property. Should any part of the earnings be labeled as an award for personal injury, such as pain and suffering or disfigurement, this portion is normally separate property.
Benefits paid for personal injuries that are meant to reimburse for medical expenses or future medical expenses resulting from the injury are typically considered separate property.
There are several ways that personal injury or worker’s compensation awards can be classified:
1. Treated as wages. Payments made that are intended to replace income caused by a work related injury are considered wages. These payments are considered community property if they are received during the marriage. However, payments received before the marriage (and after) would be considered separate property and not subject to division in a divorce. It can complicate things even more depending on whether the award is paid in a lump sum or weekly payments.
2. Treatment as injury award. It is possible for a worker’s comp award to be labeled as an award for personal injury. The premise behind this is that the award is for an injury, not lost wages. This would also mean the compensation would be separate property.
3. Treated as disability pay. While a wage replacement analysis may be used, it is possible that injury payments or worker’s comp will be treated as disability pay. In that case, any payments received through the course of the marriage would be considered community property. However, any payments received after the marriage is considered separate property.