Successful couples often find that their high-asset divorces are difficult to navigate. They have more complex resources to address and a larger pool of marital assets to divide.
If one spouse is a successful professional who earns competitive wages, their compensation could even become a complicating factor during divorce negotiations. Deferred compensation is common in certain employment scenarios. Salespeople might receive quarterly bonuses based on their overall sales. Engineers and executives might receive retention bonuses or even stock options for multiple years.
How might deferred compensation influence the divorce process?
Anything earned during marriage could be divisible
Deferred compensation could be marital property or at least partially marital property. Spouses may have to review numerous unique details to work out a property division settlement that appropriately addresses deferred compensation.
They need to determine how much of the deferred compensation is marital income. Any amount earned during the marriage might be divisible, even if the professional may not receive that compensation for months or even years. Spouses may have to settle on a specific amount when valuing deferred compensation, especially when it directly correlates to the spouse’s job performance or the value of company stock.
In many cases, deferred compensation is not directly divisible because it is not yet available to the worker. The spouses may need to decide how to use other marital assets or shared debts to balance out the value of deferred compensation.
Identifying marital property and pushing for an appropriate property division settlement can be challenging when spouses have diversified income streams and a variety of shared assets. Individuals preparing for high-asset divorces often need assistance ensuring that the outcome is overall fair, and that’s okay.