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What happens to your bonus if you decide to divorce?

Many married people in the Bay Area have seen financial success that go beyond their paycheck. They may have enjoyed the benefits of bonuses, stock options and company perks. These are all valuable assets, so it is important that those who receive them understand how they will be treated if they decide to divorce. Parting ways in a divorce can be an amicable process, but important property division decisions still need to be made.

Sometimes a person receives a prepaid bonus that has a clawback provision, meaning that if the person leaves their job within a specific amount of time or if the person doesn’t perform adequately, the bonus will be withdrawn. In this situation, it might be possible to argue that the bonus should be considered the separate property of the spouse who received it, unlike community property to which each spouse has a right, and thus should not be subject to the division of assets. If the bonus is determined to be community property and each spouse receives a share, it is important that the divorce decree outlines when and how each spouse will give the bonus back if it comes to that.

If, during the course of their marriage, a person receives a bonus for the work completed in the previous year, this money may be considered community property and will be subject to division between the spouses. Similarly, stock options earned during the course of the marriage may also be considered community property under certain circumstances.

Company perks such as an automobile, housing or other assets will have to be valued if the spouse who receives them decides to divorce. This is because these perks are generally considered compensation, and thus will be counted as income when it comes to property division, child support and spousal support purposes.

Ultimately, those who receive financial benefits from their job that go beyond their salary may want to seek legal advice, which this post does not provide. Family law attorneys may be a useful resource for those who want to part ways from their spouse in a manner that is fair to all involved.

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