The Pennsylvania Superior Court recently dealt with the question of whether post-separation disability payments are marital. In Yuhas v. Yuhas, the husband was a vascular surgeon who developed carpal tunnel syndrome in 2007 and so could not practice surgery. Fortunately, Husband had a disability income policy that paid for such eventualities. The injury occurred prior to the parties' separation in 2007 and everybody agreed that the pre-separation disability payments were marital. But what about the payments made after 2007?
Pennsylvania divides up property in a divorce by "equitable distribution", found at 23 PaCSA 3501. The general rule is that property acquired during the marriage is marital and property acquired after separation (or before the marriage) is not marital. Here, the injury occurred before separation. Ordinarily, if a spouse is injured (in say a car accident) before separation, the personal injury payout is marital even if the case is settled after separation and the money arrives after separation.
The twist here is that the continuing disability payments were contingent upon the continuing post-separation disability of Husband, not just the injury that occurred during the marriage. Moreover, the payments were made under an insurance contact, not from a legal action such as a personal injury suit.
So, the Superior Court analyzed Section 3501(a)(8) which provides that post-separation payments are not marital for "any payment received as a result of an award or settlement for any cause of action or claim which accrued prior to the marriage or after the date of final separation regardless of when the payment is received". So, when did Husband's right to seek his disability payments "accrue"? Before separation when he was injured or after separation for each month he stays injured? The Court decided that the payments were not marital because they were contingent upon proof of Husband's continued inability to work - not just inability during the marriage.
Such payments would still probably be income for spousal support or alimony, but that was not at issue in this case. The citation is Yuhas v. Yuhas, 2013 WL 5783117 (Pa. Super. 2013)
