Yes, the workers' comp payment is 'marriage property' and has to be considered for division. The law in Pennsylvania is all about timing. It asks, 'When did you get the right to this money?' James was injured and made the deal for the money while he was married. Therefore, the law treats it as property acquired during the marriage. It doesn't matter that the money was supposed to replace his salary for years after the divorce. A judge can still be fair later when dividing everything up by giving more of that money to the injured spouse if they need it, but first, it has to be put in the shared 'marriage property' pot.

No, the part of the money meant for after the divorce should belong only to James. An ex-spouse doesn't have a right to your paycheck after you're divorced. Since this payment is just a substitute for James's future paychecks, Jane shouldn't get a share of the portion meant to cover the years after they split up (from 1993 to 1998). The court should have calculated how much money that was and set it aside as James's separate, personal property.

Yes, the $42,000 from the work injury should be split in the divorce. James got the right to that money while he and Jane were still married. When he got the right to the money matters more than what the money was for. 

But just because it can be split doesn't mean it has to be split equally. The court should think about things like James' health, job skills, and need for the money when deciding how to split it. The court could give more or even all of it to James if that seems fair.

I disagree. I don't think money meant to replace money James would have earned after the divorce should be split with Jane. Jane shouldn't have a right to money replacing what James would earn after they split up. 

The $42,000 was meant to cover James' lost wages even past when they separated. The part covering money he lost after separation shouldn't be split with Jane. I would send the case back to figure out how much of the $42,000 was for lost wages after separation and not split that part.

A trial court has "the authority to divide the award as the equities presented in the particular case may require."

When a court endeavors to divide marital property equitably, it must take into consideration the factors delineated in Section 3502 (a) of the Divorce Code.

Our Supreme Court has held that disability payments are not, per se, excluded from the definition of marital property for equitable distribution purposes.

The appointed master concluded, and the court of common pleas agreed, that the commutation award was marital property because it was received during the marriage and was reimbursement for lost wages.

CSA § 3501 (a)(8) "makes no distinction concerning the purpose of the award or settlement, but posits that it applies equally to all claims or causes of action for personal injury, lost wages, disability or other damage."

—at 3-7 (2001)("Title is not determinative"); Brett R. Turner, Equitable Distribution of Property § 5.05 at 127 (2d ed. 1994)("legal title is irrelevant to classification of property"); id., § 5.24 at 382 (Supp. 2003)("A fundamental principle of equitable distribution law provides that the classification of property does not depend on legal title).

Rather the court directed that the evaluation must center on "when the right to receive that payment arose."

Jurisdictions such as New Hampshire, which divide "all property that either spouse owns, with no distinction between marital and separate property,"

"The courts attempt to split property equitably, instead of equally, taking into consideration such factors as length of marriage, the contributions of both spouses, ages and health of each spouse."

In many jurisdictions, each individual asset need not be divided based on the same percentage of division.

Yes, a workers’ compensation commutation award that accrued during the marriage is marital property subject to equitable distribution. The Pennsylvania Divorce Code employs a 'mechanistic' approach where the timing of the accrual of the right to the property is determinative, not the underlying purpose of the award. Under Section 3501(a)(8), a claim is excluded only if it accrued prior to the marriage or after the date of final separation. Here, James Drake's injury occurred and the commutation agreement was executed during the marriage, meaning his right to the award 'accrued' during the marriage. The court explicitly rejects the 'analytic' approach, which would parse the award based on what it replaces (e.g., future earnings vs. past earnings). While the purpose of the award is irrelevant for classification, it can and should be considered by the trial court during the equitable distribution phase under the factors listed in Section 3502, which allows the court to consider a party's health, needs, and employability.

No, the portion of a workers' compensation commutation award representing future earnings after the date of separation should not be considered marital property. A spouse has no right to the other spouse's earnings after the marriage ends; therefore, they should have no right to a payment that is a substitute for those future earnings. The dissent advocates for the 'analytic' approach adopted by other jurisdictions, which separates the award into marital and non-marital portions based on what losses the award compensates for. The case should be remanded to determine what portion of the award compensated for lost earning capacity after the parties' separation and exclude that amount from the marital estate.

Yes. The commutation award is considered marital property because it was received during the marriage and replaced wages earned during the marriage. The timing of the right to receive the award, rather than its purpose, is the determining factor for classification as marital property under Section 3501(a)(8) of the Divorce Code. Here, Husband's right to the commutation award accrued during the marriage, well before the parties' separation in July 1993, and thus is subject to equitable distribution. 

However, classifying the award as marital property merely gives the court authority to divide it as the equities in the particular case may require. The court must consider the factors in Section 3502(a) when dividing the property, such as the parties' ages, health, vocational skills, employability, sources of income, and needs. The court has discretion to award all or a portion of the commutation proceeds to the injured spouse based on these equitable factors. The ultimate distribution aims to protect any future income concerns addressed by the commutation award.

I respectfully dissent because I do not believe that a workers' compensation commutation award which represents future earnings is marital property subject to equitable distribution. A spouse has no right to the other spouse's earnings after the marriage ends; therefore, the spouse should have no right to a workers' compensation award that substitutes for those future earnings. 

Here, the commutation award compensated Husband for lost earning capacity for a period extending beyond the date of separation in July 1993. The portion of the award representing Husband's future earnings after separation should be excluded from equitable distribution. I would reverse and remand for a determination of what portion of the award represented future earnings after separation.

Drake v. Drake

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