Personal Injury, Worker’s Compensation, and
by Wes Cowell, updated 28 December 2015 -- suggest a correction
Personal injury awards, worker's compensation awards, and disability awards (lawyers and judges refer to these as "choses in action") may accrue during the marriage. That means they are "marital property" and are divided in a divorce. Not all lawsuit awards should be divided between the spouses, however. Each case is different. Need advice? Call, leave your info., or scheduleschedule a consult.
General: "'Marital Property' means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage" with only a few exceptions. 750 ILCS 5./503(a). Lawsuit awards are not in the list of exceptions. That means tha tlawsuit winings are treated as marital property. Indeed, 750 ILCS 5/503(a)(5) says if one sposue must sue the other "to obtian insurance coverage or otherwise recover from a third party and the recovery is related to amounts advanced by the marital estate, the judgment shall be considered marital property."
Personal Injury Awards: When a spouse in injured during the marriage, the P.I. award is characterized as marital property. When the property is divided, the court, under 750 ILCS 5/503(d), may allocate a greater share of the award to the injured spouse.
Workers' Compensation: in 1994 the 5th District Appellate Court issued its decision in In re: Marriage of Waggoner, 261 Ill. App. 3d 787, 199 Ill. Dec. 844, 634 N.E.2d 1198 (5th Dist., 1994). The court applied what became known as the "analytical approach:" only the amount of the award that was for wages lost and medical expenses incurred during the marriage were held to be marital property.
Two years later, the Illinois Supreme Court rejected Waggoner's analytical approach and said:
The so-called "analytical approach" completely ignores section 503 of the Act, which mandates what constitutes marital and non-marital property for purposes of disposition on dissolution o fmarriage . . . . [T]he worker's compensation award constitutes marital property because the claim accrued during the marriage.
In re: Marriage of DeRossett, 173 Ill. 2d 416, 419 219 Ill. Dec. 487, 488-89, 671 N.E.2d 654, 655-56 (1996)
The Supremes said that Illinois' divorce law (750 ILCS 5/503) had enough teeth to adequately protect an injured worker. The law says the court must consider all kinds of factors, including "the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties." The law already has enough tools, said the Supremes, to "protect worker's compensation recipients from losing their fair share of such awards in dissolution cases."
Disability Awards: When an injury that leads to disability occurs during the marriage, the disability award is characterized as marital property. Again, like personal injury awards and worker's comp. awards, disability awards are characterized as marital property and divided under 750 ILCS 5/503(d).
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> Marital Property Division Factors
> "Marital" & "Non-Marital" Property
> Purchases Anticipating Marriage
> Dissipation — Stolen & Wasted Assets
> Commingling Marital and Non-Marital
> Transmutation — When "Marital"
Becomes "Non-Marital" & Vice-Versa
> 401(k)s and Retirement Investments
> Military Pensions and Divorce
> Saving the House – Injunctions
> Dividing S-Corp Retained Earnings
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