Negotiating a financial settlement for a divorce can be relatively straightforward when the incomes of one or both spouses come from a regular salary. But what happens when earnings come from other types of compensation?

In addition to a salary, people can receive bonuses, stock options, commissions and perks. Figuring out how those assets are considered in a divorce settlement can become more complicated when determining marital assets that are subject to division.

Potential sources of income besides salary

Ohio is an equitable distribution state, meaning property is “equitably” distributed, but that doesn’t mean it will be a 50/50 split. Determining how to divide compensation becomes more complicated with these sources of income:

  • Prepaid bonus: A bonus paid in full during a marriage can be easy to distribute. However, bonuses with “clawback” provisions are more complex. Clawback refers to the employee repaying the employer all or a portion of a bonus if they leave their job early or don’t meet performance standards.
  • Bonus for prior year’s work: Avoid “double counting” a bonus from a previous year where your spouse demands that the incentive is split, but the full amount still counts as part of your total compensation.
  • Commissions: Filing for divorce sooner may be a good option if you are planning to close a sale with a hefty commission so you can keep as much of the amount as possible.
  • Earnings from a new job: During a divorce, be aware that taking a new job that offers incentives and vesting options to match or exceed your prior compensation level could lead to further scrutiny.
  • Stock options: Your spouse may be entitled to a portion of any earnings from stock options related to your employment during the time of the marriage.
  • Perks: Use of a company car or a housing allowance and other fringe benefits can lead to negotiations over how they will be valued in a divorce settlement.

Seek legal advice for complicated financial matters

Divorce can take an emotional toll on a family but being prepared and understanding how your property will be divided can help relieve some of the stress. An experienced family law attorney here in Ohio can help you with the complicated process of dividing assets and help you receive a fair settlement.