Are insurance payments considered separate property?

Question:mens divorce lawyer

I am going through a divorce and am receiving disability payments as a retired police officer.

My wife thinks she can get half of my disability retirement benefits.

Can my disability insurance be counted as income and subject to property distribution?


Whether your disability insurance will be included in your income or not depends on the facts of your case and the laws in your jurisdiction. I do not practice in your state, so I cannot inform you as to the state’s specific laws and I suggest that you seek advice from an attorney in your jurisdiction.

Based on my informal research, I can give you some general guidelines about the law related to retirement income and what may be involved.

In California, the state’s Supreme Court has determined that retirement pay based on disability has two components: (a) compensation for loss of earning power and personal suffering, and (b) retirement support.

The retirement support component, to the extent that it is attributable to employment during marriage, is community property.

To determine whether the disability benefit should be marital property or not, the court will look at the purpose being served by a “disability” pension at the time benefits are being paid.

Generally, disability benefits are not marital property and retirement benefits are marital property. Whether your retirement benefits will be considered marital property or not depends on whether you continued to work after the injury that resulted in the disability benefit and your age.

If you continued work after retiring on a disability pension, the court sees this as evidence that the pension’s purpose is to replace retirement benefits rather than to compensate for the economic loss and personal suffering occasioned by your disability. Therefore, the court may consider the benefit to be marital property.

If the benefits continue beyond retirement age, they are considered to have two functions — one to replace lost earnings during disability and the other to provide income in retirement.

When considering benefits that serve such a dual purpose, the California courts have generally held that upon the recipient becoming eligible to retire, the predominant purpose of the “disability” pension is to provide the recipient support, and thus, the benefits are then considered marital property.  

Again, I cannot inform you as to the state’s specific laws and I suggest that you seek advice from an attorney in your jurisdiction.

Cordell & Cordell has men’s divorce lawyers located nationwide.


Trisha B. Festerling is an Associate Attorney in the Milwaukee, Wisconsin office of Cordell & Cordell where she practices family law exclusively. Ms. Festerling’s practice is focused on men’s divorce, child support, child custody, paternity and modification. She is licensed in the state of Wisconsin. Ms. Festerling received her Bachelor of Science degree in Criminal Justice with a focus on Political Science, Magna cum Laude, from the University of Wisconsin – Milwaukee. She received her Juris Doctor from Regent University School of Law in Virginia Beach, Virginia.

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