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Disability Insurance Benefits and the Division of Property After Divorce

  
  
  
disability insurance plan quotes after divorceDivision of property is one of the most complicated aspects of divorce. Disability benefits are one of the many things that couples have issues about in the division of property. However, differing state laws affect how such benefits are treated. Those who receive disability benefits do so in lieu of earned income because they are ill or injured. In the case of divorce, the division of such benefits depends on a variety of factors. Some states consider such benefits to be marital property while others consider it separate property. How is it considered by the courts will help to determine the way it is dealt with during the divorce. What helps to determine this is when the payments began and the findings of a purpose analysis concerning the benefits.  

The Timing of Benefits 

In many states, anything acquired during the marriage is considered to be marital property, including disability benefits. Certain states like Montana, New Jersey, Louisiana, Illinois, Arkansas and Delaware, even consider disability payments after the marriage is over to be marital property if they were based on work during the marriage. In such cases, the date that eligibility for disability benefits was determined is important for the divorce and division of property.  

In other states, only income that originates during the marriage is considered to be marital property. In this case, if the person was eligible for benefits prior to the marriage and they continued during it, the spouse is not entitled to claim such benefits as marital property. New Mexico, Minnesota, Arkansas, Idaho, Maryland, Delaware, Minnesota and in some circumstances Texas, subscribe to this theory.  

States including Florida, Alaska, Idaho, Indiana, Colorado, Louisiana, North Carolina, Maine, Missouri, Maryland, Pennsylvania, Oregon, Washington and Rhode Island take the replacement approach when it comes to the subject of disability income. This means that the disability benefits are only marital property because they replace income. Such benefits are therefore limited to the duration of the marriage only. Benefits received following divorce are considered separate property even if the qualifying disability occurred during the marriage.  

The Analysis of the Purpose of Benefits 

In many situations, a court will analyze the exact nature of the disability payments and determine if they are to be considered marital property or separate property. If they are deemed to be deferred payments based on work done during the marriage, they will be considered to be marital property.  

Anyone who has a private disability insurance pension is subject to even more scrutiny concerning the purpose of the benefits he or she is receiving. Often they will be deemed to be a combination of both separate property and marital property. The percentage will depend on how long the marriage lasted, how long the contributing employment lasted and what the pension is intended for. If it is for pain and suffering and as a replacement for the lost ability to earn income, it is separate property. If it is in lieu of a retirement package, it is more likely to be deemed marital property.  

If you are embroiled in a divorce it is important to understand the role of disability benefits in it. Ask your lawyer if you are eligible to receive some of your spouse's disability income following divorce. Ask about the state laws concerning the divisibility of such benefits. Ask if private disability benefits are considered marital or separate property. It is important to be forearmed with knowledge prior to working on a divorce settlement.  

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Comments

I bought a private disability insurance policy for both my x and 
 
I for the financial security being able to stay in the family home incase something were to happen. 
 
my x and I owned a business together. He would never need this policy as he owns and inherited millions of money and property. I do not. He is now collecting on this policy over 7,000.00 a month, and I get nothing. This was not brought up in our divorce. The policy should be split in half, as 
 
it was purchased with comunity money and during our marrige. 
 
What can I do to get my share, and can I at this point??? Please help. 
 
it was a comu
Posted @ Tuesday, March 08, 2011 12:55 AM by colleen
When i was living in colorado me and my wife separated. she went and moved to joplin, mo with another man. while separated i had an accident at work and became totally and permanently disabled. i won a lawsuit. with that money i bought property in NY state. the deed is in my name. we got back together. while back together i won my social security disability case. This was between 2002 and 2005. we got back together in 2005. now here it is 2012 and we are going to proceed with a divorce. what is she entitled too. please someone help . i acquired my property with my disability monies.
Posted @ Sunday, February 12, 2012 6:26 AM by Edwin Roach
Well there are some rules for the division of the property after divorce.
Posted @ Tuesday, March 18, 2014 3:26 PM by Bankruptcy Attorney Glendale
After reading this post, I understand that I should be the one receiving the benefits. I am disabled and can't work. My ex took everything...and our pension. My attny was friend with his family and I got slammed. He took everything, I just found out that he bought his girlfriend a house when we were married. The entire case was fraud. I don't know if there is a statue of limatations on this... sigh. I can't sleep at night because I got so ripped off.  
My ex's mother died and he is worth millions... lot's of millions. I need to get an attorney that is honest. ... and I worked my life away only for him to take everything I worked for and take it for himself and his girlfriend.
Posted @ Thursday, April 10, 2014 2:45 PM by Colleen
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