Dividing Personal Injury Awards and Worker’s Compensation Monies

When one spouse has been injured during the marriage and he or she receives a monetary award as a result of a settlement, it may seem unfair to evenly divide that money between spouses during a divorce. Especially if one of the parties is still injured and requires continued care, it would not seem fair for the other spouse to receive that money. On the other hand, the non-injured spouse may argue she cared for the injured spouse and she helped support the household during those hard times and she should receive some portion.

Every case is different and the outcomes will vary. The case In re Marriage of Wagoner, 261 Ill. App. 3d 787 (5th Dist. 1994), however, set forth the framework for the general approach Illinois courts follow.

In Illinois, the courts typically focus on what the purpose of the award was when determining how to equitably divide it. This is called the “analytical approach”. There are typically reasons for the award: (1) to compensate the injured spouse for pain and suffering, disability, and disfigurement or lost limbs, and (2) to compensating the injured spouse for lost wages or lost earning capacity, and medical and hospital expenses.

To the extent a personal injury award or settlement represents out-of-pocket expenses incurred during the marriage, such as medical expenses and lost wages, this part of the award or settlement has frequently been classified as marital property. The pain and suffering are, however, personal to the claimant, and the compensation for these elements should be regarded as non-marital property. Compensation for future loss of wages also should be classified as non-marital property, consistent with the general rule that future wages are not marital property

Importantly, if the injured spouse receives significant non-marital money from a settlement this may influence the court’s division of marital estate. The court may be incline to award a greater portion to the non-injured party if that seems equitable.






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