The divorce decree awarded wife 17.5% of net proceeds from husband’s workers’ compensation settlement. The settlement agreement included a Medicare set-aside arrangement of $70,000 for future medical expenses from the injury. The Trial court said that the $70,000 set-aside was to be included in net proceeds for purposes of calculating wife’s 17.5% share.
DETAILS OF THE SETTLEMENT AGREEMENT:
Total amount of settlement $365,000 (does not include $70,000 Medicare Set Aside (MSA))
Deduction: Attorney’s fees $67,903.35
Deduction: Medical reports, X-rays $766.60
Amount employee will receive $296,330
The parties agreed that wife was entitled to 17.5% of the $296,330. However, a dispute arose as to whether wife was entitled to 17.5% of the $70,000 set aside in the MSA.
Husband argued that the funds were set aside solely to satisfy Medicare’s interests. Wife argues the language of the divorce decree. “Net proceeds” includes reimbursement for medical payments actually paid by husband. Medicare will pay for covered medical services only after the exhaustion of the $70,000.
The set-aside is for the sole purpose of paying husband’s medical bills. The settlement is reimbursing him for his future medical costs.
The divorce decree defines “net proceeds” to include payment for future medical costs. The funds in the MSA are net proceeds. The trial court correctly determined that wife is entitled to 17.5% of the entire settlement.
In re Marriage of Washkowiak, 2012 IL App (3d) 110174.
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