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Is Deferred Compensation Subject To Property Division?

For some couples, property division just means looking at earnings that were directly paid to both people and then dividing the assets. These individuals may be paid by the hour or they may be on salary. Either way, they’re just looking at their specific earnings.

However, for many, they have to go beyond their salary itself. They need to look at other types of compensation. An example of this could be a bonus that gets paid out at work. If your spouse earned a bonus, it may not be counted as part of their salary, but it still counts as earnings that were obtained during the marriage. This means that you may deserve at least a portion of that bonus.

What about deferred compensation?

There are some situations in which employees will ask for deferred compensation. They’re still going to be paid, likely for tasks that they’ve already completed, but they’re willing to wait until a later date.

You may be concerned that your spouse is intentionally deferring compensation so it doesn’t look like that money was earned during the marriage. Perhaps they think of this as a way to hide assets. If their boss agrees to hold all of their earnings for six months and then just pays them out after the divorce is finalized, they believe they can keep you from some of those earnings.

But the reality is that marital assets that are earned while you are married need to be divided. This could include deferred compensation. Even though it wasn’t provided to your spouse yet, it was still earned while the two of you were together. That is what the court wants to look at when deciding how to divide your assets. So you may still deserve a portion of that compensation, regardless of when it gets paid to your spouse.

A complicated situation

If you’re considering things like this, you’re already in a more complex property division situation. You may be worried about your spouse hiding assets or doing something of this nature. Always be sure you know what legal steps to take.

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