The division of financial assets in a divorce is complicated and often unpleasant. It can be frustrating to see the results of your hard work split between you and your spouse, especially when the divorce is hostile. This is particularly true when a divorce triggers the division of high net worth financial assets, like bonuses and stock options. In this post, we’ll look at some of the most common financial assets above and beyond salary or hourly wages and how they might be divided in an Illinois divorce.
Bonuses
If you received a bonus before you filed for divorce, it will probably be considered marital property. But if you get the bonus after the divorce was finalized, you can keep it – even if the bonus was earned by work done during the period of the marriage. The one exception to this is that, if the bonus was contractually guaranteed during the marriage, it would be looked at as if it were guaranteed income like a salary.
One thing to consider when negotiating division of bonus monies is whether or not the bonus had a clawback provision. This means that, if you leave your employment before a set date, you have to give the amount of the bonus back. If a bonus is divided between spouses and you have to leave the company for reasons beyond your control, it may be wise to include a provision in the divorce agreement stating that your spouse must repay their share.
Stock Options
Illinois law treats stock options received during a marriage as marital property, whether or not they are vested or whether you know their real value at the time of the divorce. Often, divorce agreements will have provisions stating you will pay your former spouse their share of the stock options when you exercise your options on them.
One exception to this is whether stock options were given as part of an inheritance. As with other inheritance assets, stock options are considered yours alone if you inherit the stock options through an estate planning document, such as a will.
Commissions
Like a bonus, if a commission is dependent on your behavior up until the date when the commission is given (like not leaving the company or showing a consistent performance), you usually get to keep the commission if you received it after the divorce was finalized.
However, if there is a contract guaranteeing a commission amount based on an individual sale, and that sale occurred prior to the divorce, that commission will be considered marital property.
Consult a Hinsdale, IL Divorce Attorney
With some complex jobs, commissions may take years to earn. Hiring an experienced Illinois divorce lawyer will help you negotiate your options and protect your earnings. Working with a DuPage County divorce lawyer at the firm of Martoccio & Martoccio can ensure a fair and accurate division of property. To schedule a confidential consultation, call us today at 630-920-8855.
Source:
http://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm