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Are deferred pay and bonuses at risk when you divorce?

On Behalf of | Jul 22, 2022 | Property Division |

Career success often means more pay and a more prestigious role at the company that employs you. As your title becomes professional and your overall compensation increases, the compensation you receive also tends to become more complex.

Your employer may want to offer you deferred compensation as an incentive for you to boost your performance or stay with the company longer. You can derive tax benefits from delaying when you receive compensation for your work. Bonuses can similarly help companies delay certain expenses while motivating their workers to meet certain performance metrics.

If your employment contract includes promises of deferred compensation or terms under which you qualify for bonuses, you may get paid for your work months or even years after you complete that work. Will those extra forms of compensation be at risk during your upcoming divorce?

Some deferred compensation may be subject to division

Under Missouri property division rules, your income earned during the marriage is subject to division when you divorce. You and your ex could potentially negotiate a property settlement that excludes your deferred compensation or accounts for it in other areas. You can provide the courts with your property division agreement and maintain control over the exact outcome.

If you don’t settle the matter yourselves, litigated property division proceedings could result in your spouse receiving some of that deferred compensation. A judge will typically consider the amount that you earned during the marriage to be part of your marital estate that you need to share. Even if it will be several years before you receive that stock or pay, your spouse may have a partial claim to it.

Employment benefits and pay can complicate divorces

The more complex your financial circumstances are and the more diversified your personal holdings are, the more complex your divorce proceedings will likely become.

From a dependent spouse asking for you to continue providing them with benefits to a court order forcing someone to divide their pension, there are many ways in which your income and benefits can be vulnerable in modern Missouri divorces.

Putting an appropriate value on your benefits and deferred income can be an important part of protecting yourself in complex property division proceedings.