Portion of husband’s workers’ comp settlement properly deemed separate property

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With rare exceptions, money and property that comes into a marriage are marital assets that get divided in divorce. A recent North Carolina Court of Appeals case is one such exception.

That case involved a man who got hurt at work a year after he and his wife married. He received a $589,000 lump sum payment to settle his workers’ comp claim.

When he and his wife got divorced a couple years later, the family court found that a portion of the settlement was the husband’s separate property.

The wife challenged the finding, arguing that the entire settlement, as well as items purchased with its proceeds, should be considered marital property.

But the Appeals Court upheld the decision.

Significantly, the court used the husband’s maximum weekly pay rate to determine the marital portion, while deeming the rest of the settlement to be his separate property. The court also found that the couple used up the marital portion to upgrade their lifestyle during periods of unemployment, while the remaining balance — which the husband had kept in his own separate account — was separate property.

Accordingly, when it was time to divide up the marital assets, there was nothing marital remaining in the settlement for them to split.

This, of course, is one case from North Carolina. The law can differ depending on circumstances and where you live. But if you receive a large workplace injury settlement

and you’re contemplating divorce, a lawyer can tell you how it might be handled in your state.

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