Can Arizona Workers’ Compensation Benefits and Awards Become Assets in a Divorce?

Most people never consider what would happen to their finances and assets should a marriage fall apart, and divorce papers are filed. Each divorce case is considered for who filed for divorce and why, the assets involved in the case, who will be keeping any under-aged children (under 18), what assets were acquired during a marriage, assets acquired before the marriage, and more. Arizona, like many other states,

PARTIAL LOSS OF BENEFITS OR AN AWARD

A recent case in Massachusetts awarded the ex-wife nearly half ($50,000) of a Workers’ Compensation settlement award that had not yet been fully distributed to the ex-husband when the judge and court considered the funds as part of marital assets. In Warnajtys vs. Warnajtys, No. 18-P-1566 of the Massachusetts Appeals Court on June 16, 2020,

The early part of the settlement funds had already been distributed shortly after the divorce papers were filed by the husband. The money was used by both the husband and wife, who still lived at the house with their young daughter, now age eight, despite filing for divorce. Here is a list that shows what the judge and court considered before making a final judgment.

1. Health and employment status of the husband before and after the accident,
2. Who maintained the only child from this marriage – the wife,
3. Wife’s employment history and income,
4. Length of the marriage – eight years, and
5. The wife’s desire to buy out the husband’s share ($105,000) of the house.

The judge also required the husband to maintain a life insurance policy for the child’s benefit in case he passed away early before the child reached adulthood. As the husband had filed for social security disability insurance benefits but had not been approved at the time of the court, the child would also be eligible for payments upon his death.

CAN YOU PROTECT YOUR AWARD?

Every case is different, and a judge and the court will review all the circumstances before making a final decision. If you have a workers’ compensation settlement award, the only way you could keep the full amount is if you can show the judge that the money is for medical bills and suitable necessary living expenses.

If the husband received the award directly to him and kept the money in a separate bank account under his name, then there is a less likely chance that the funds would become assets in a divorce proceeding. Property and assets obtained before marriage would likely remain the personal asset of the spouse and not be considered in a division of marital assets. A house, car, boat, other properties that are purchased during the marriage, would be divided up between both parties in any state that considers community property or equity in a divorce.

This also includes debt acquired through credit cards and payments on any property/asset. Arizona is one such state that observes community property and laws.

CONCLUSION

While divorce proceedings can be acrimonious, it is always important to ensure the safety and well being of any child born from this union or adopted during that same time. If you have concerns about a settlement distribution or if you need help with your workers’ compensation claim, call us at once. We are here to help you. 602-346-9009.