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Dividing Disability Benefits After a Divorce

The property division process involves the marital assets that a couple gained during their marriage being subject to an equitable split. Disability benefits can be considered to be a marital asset, which means they would also be subject to the property division process. 

Disability benefits are classified as any payments that a worker receives after suffering an injury or illness that prevents him or her from being able to work. A government program or a private insurance policy generally pays out these benefits. 

However, it’s important to consider the timing when looking at these benefits. All disability pay that was received during a marriage constitutes marital property, but if the pay was earned before the marriage occurred, then it is not considered to be marital property. If the benefit coverage is tied to work that occurred during a marriage then it is also considered to be marital property. However, any post-divorce earnings from disability benefits are still considered separate property, even if the original illness or injury occurred during the marriage. 

These issues can also be complicated when it’s determined that disability benefits from private insurance policies could have both separate and marital property elements, depending on the purpose of those benefits. The purpose could be, for example, to compensate the employee for lost earnings and suffering, which would make the benefits separate property. There are other purposes that would make the benefits marital property. 

Clearly, the issues of dividing disability benefits after a divorce can be complex. For assistance with this process, work with the respected legal team of Appelhof, Pfeifer & Hart, P.A. in Minnesota.

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