Personal Injury Settlement Essay

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Going through a divorce can be a difficult time for both parties involved. As part of a divorce, you probably know that martial assets must be distributed. Colorado is an equitable distribution state, which means equal or fair division of marital property. This differs from states that follow community property distribution.
Interestingly, Colorado happens to be one of just four states that use different methods of allocating personal injury settlements and workers’ compensation awards. So, let’s look at how both of those would be assessed during a dissolution of marriage.
Personal Injury Settlement
Colorado uses a “mechanistic” approach when it comes to personal injury settlements. That means, that the court will only look at the timing of the injury to classify the settlement as marital or separate property. There is a statutory presumption that all property acquired during a marriage is marital property. This presumption can of course be overcome. However, within the realm of personal injury awards, when looking at the statute concerning the distribution of marital property, C.R.S. 14-10-113(1), the amount of a personal injury settlement is subject to disposition along with other marital …show more content…

In In re Marriage of Smith, the court ruled that the approach taken with personal injury settlements was not necessarily the approach to take with workers’ compensation. The court in that case concluded that the Colorado Workers’ Compensation Act was about wage replacement for an injured employee and not necessarily a reflection of marital property. Thus, say in a situation where a workers’ compensation award compensates an employee for diminished earning capacity post-dissolution of marriage, that amount would not be marital property. Therefore, just because an injury and award may have occurred during the marriage does not necessarily make it marital

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