How are Disability Benefits Divided in a Divorce?

Property division is generally one of the most contentious issues in divorce, and it doesn’t only regulate how real estate or household possessions are divided. Other financial awards, including disability benefits, are also considered to be marital assets, meaning they are also subject to the property division process.

Disability benefits are typically paid to a worker after illness or injuries leaves him or her incapable of working. The money usually comes from either a government program or a private insurer.

The first step in dividing disability benefits is to classify or define the types of benefits at play in the case. In classifying the disability benefits, first you must determine whether the benefits are marital or non-marital (also known as separate) property. There are two main methods for classifying these benefits: analyzing the timing and the purpose of the benefits.

• Timing. In some cases, courts may choose to primarily analyze the timing of the benefits. Any disability pay received during marriage in this situation would be considered marital property. However, there’s also a question as to when a person originally became entitled to disability pay. If disability coverage is tied to work that happened during marriage, then disability pay is marital property. However, if all the work and disability occurred before marriage, then the benefits are considered to be non-marital property.
• Purpose. If the purpose of the disability benefits was to compensate the employee for his or her lost earnings and other personal pain and suffering caused by the disability, then the benefits are considered to be separate property. If there are retirement benefits in place based on work done during marriage, it could be considered marital property.

There’s a lot of gray area when dividing disability benefits during a divorce, so it’s important to meet with a skilled divorce attorney at Bryan L. Salamone & Associates.