Workers’ Compensation Awards
Pennsylvania law does allow for workers’ compensation awards to be distributed as marital property. The key factor is if the right to receive the award accrued during the marriage. Pennsylvania generally defers to the timing of the receipt of assets as opposed to the method in which it was obtained for classifying what will be presumed marital property. In that regard, the purpose of the award is not relevant in determining the marital status. However, the court still has the discretion to consider the purpose of the award and other equitable considerations when determining what percentage should go to each spouse in distributing the marital estate.
Drake v. Drake, 725 A.2d 717 (1999) is one of the cases that explains Pennsylvania’s stance on workers’ compensation awards. In the opinion, the court rejects the analytic approach which only allows an award to be marital if it’s intended to replace lost wages during the marriage. The award would be separate property if it is intended to replace future lost earnings extending beyond the end of the marriage. In Drake, Husband had sustained an injury in 1985. By 1989 he had entered an agreement with his employer to receive a lump sum commutation award. The parties did not separate until 1993. The court held that surely the right to receive the award had accrued during the marriage and was accordingly, marital property subject to equitable distribution. Focht v. Focht, 990 A.2d 59 (Pa. Super. 2009) confirmed the decision in Drake and also held the same rule applies as far as date of accrual for personal injury awards and lottery settlements.
