Dividing Work Comp & Injury Awards

Is the money your spouse received from a work related or accident injury considered "community" property and divided equally after a divorce? This question is often asked and the answer can be complex. Earnings by either party could be community property, so any income received from a work related or personal injury would need to be decided by the court in a divorce.

The Nevada divorce courts generally treat workers compensation benefits as a wage replacement and any payments received during the marriage would be considered community property. If part of the award is specifically labeled as a personal injury award for disfigurement, pain, or suffering then that portion is considered separate property.

Personal injury benefits designated to reimburse for medical expenses related to the injury, future medical expenses and pain of suffering are normally considered separate property.

There are at least three different ways that workers' comp payments or personal injury award can be classified:

1. Treated as wages. If the payments are designed to replace lost earnings due to a work related injury, the payments would be characterized as wages. Those payments received during marriage are community property; those received before or after marriage are separate property. Further complicating the analysis is that work related injury benefits can be awarded to an employee injured on the job either as a lump sum or in weekly installments.

2. Treatment as injury award. A workers' compensation award could be classified as a personal injury award, on the basis that they are meant to compensate for physical injury rather than lost wages. In that case, the award would then be considered that spouse’s separate property.

3. Treatment as disability pay. In some instances, a wage replacement analysis will be used, but the workers' compensation or injury payments would be treated or classified as disability pay. In that event, any compensation received during marriage is community property and compensation received after marriage is the injured worker's separate property.

Contact Our Office at (702) 914-0400 to Discuss Questions of Property Division With a Divorce Attorney.