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Awarded damages as separate and marital property in divorce

| Nov 13, 2020 | divorce and family law

Virginia approaches divorce with an eye for equitable distribution, but the process for determining what is marital property can be an interesting puzzle — especially when factors such as workers’ compensation or other damages come into play. It might seem strange to consider workers’ compensation an asset, but it stands as potential property in a divorce classification. Given that, it may seem like any income from a damages claim would fall under marital property, as it is money received during the marriage.

Marital property encompasses all jointly-owned property and anything acquired during the marriage, besides separate property. As the Virginia State Bar describes, there is a complex third category of property that mixes both separate and marital.

The purpose of damages

Damages might amount to a large sum of money depending on the case and claim. The insurance or compensation organization may divide portions of the money for different reasons. The purpose of said portions may come into consideration when determining which portions count as marital property. For example, any money awarded for lost wages may fall under marital property, as a person’s income earned during the marriage factors into that.

But damages awards for personal trauma like pain and suffering may not necessarily fall under marital property depending on the investigation, as that portion pays out for something an individual suffers as opposed to what a marriage endures.

Proof of property

According to The Elder Law Journal, a spouse must provide proper documentation that proves the courts should award specific accounts or portions of accounts to them as separate property. Providing clear and organized evidence may help clear up any confusion about complicated divisions like workers’ compensation or personal injury damages.