Disability Payments and Equitable Distribution
Wright v. Wright, 222 N.C. App. 309, 730 S.E.2d 218 (2012)
- Facts: Plaintiff and Defendant married in 2002 and subsequently separated in 2008. Defendant was a professional football player in the NFL. While playing football, Defendant suffered significant injuries, three of which were sustained while he was married to Plaintiff. Defendant retired in 2008 due to those injuries. Defendant began receiving disability payments because of his retirement from the NFL. He also applied for permanent disability. These benefits are paid to former players. The trial court classified these disability benefits as deferred compensation programs and distributed them in equitable distribution. Defendant appealed.
- Did the trial court err in concluding that the disability payments were marital property?
- In classifying personal injury awards, the portion of the award representing compensation for the disability or pain and suffering is separate property, while economic loss can be marital. It requires the trial court to determine whether the award was made for disability or for economic loss. Disability is not marital property.
- Put simply, if the award is based on losses as a result of disability, it is separate property. If it contemplates future economic loss that is not tied to the injury, it can be marital.
- But here, the trial court did not make those findings for the disability payments. For Defendant’s permanent disability payment, the trial court did not make findings that any portion of marital labor (e.g., that Defendant paid into this disability fund) were used to acquire the benefit. Should that money be traced, then perhaps it could be classified as partially marital.
- Personal injury, disability, and workers compensation awards can often become the subject of equitable distribution. These can be overly complex as a result of the analytical test the courts use to determine whether the award has marital components. Because of the complexity, if you have such an award and are going through a separation and divorce, it is highly recommended that you contact an attorney for advice.