How is workers’ compensation treated in asset division?

One of the key considerations in any divorce is how to ascertain what assets belong to the marriage and which ones are separate assets. This often depends on when the asset was acquired by one of the spouses. In this regard, a question that comes up on occasion concerns assets such as sums of money that one spouse becomes entitled to during the marriage but which pay out after the spouses separate. This can occur in situations involving workers’ compensation benefits.

Missouri courts have had several opportunities to consider the issue of workers’ compensation as a potential asset of a marriage. Although different cases have treated the subject with some variations based on unique fact situations, the general rule is that such benefits received by one spouse after the divorce are separate assets to the extent that the benefits are to compensate the spouse receiving them for future loss of earnings after the marriage dissolution.

The rationale is that workers’ compensation benefits are not earned as compensation – which would otherwise be considered to be a marital asset – but rather to help workers whose earning capacity will be diminished in the future. Benefits that accrue, and which are paid after the marriage dissolution are not part of the marital property in the same sense that a worker’s future earnings are.

Workers’ compensation benefits are but one possible consideration when a couple needs to examine the issue of which assets to count as marital assets, and depending on the particular situation that a divorcing couple faces how to treat those assets can change. This issue, and any others involving asset distribution, should be addressed with the assistance of legal counsel experienced with divorce representation and knowledgeable with relevant Missouri statutes and how courts in this state interpret them.