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Is your soon-to-be ex entitled to your stock options or bonus?

There are a variety of factors that make for contentious divorce negotiations. Conversations over child custody or support, alimony and property division often get heated. Amherst judges often consider each spouses’ income and their compensation structure when making awards.

If you receive a standard salary, then negotiating a settlement in your divorce will be easier than it will be if you’re paid using a variable compensation plan.

Annual bonuses

If you receive an annual bonus, then both your income and anything extra that you receive may be divided up among you and your spouse when you divorce. You have to be careful if this is what you two ultimately agree to do though.

You should make sure that your agreement reflects that your spouse may have to give the money back if your bonus is rescinded for some reason beyond your control. If you quit your job voluntarily, then you may have your settlement written so your spouse has no obligation to reimburse you the bonus that they received.

Stock options

New York is an equitable distribution state. What this means is that any type of compensation that you or your spouse earned during a marriage is considered as marital property. The only type of stock option that generally isn’t a joint asset is a future-based one. Any dividend that a spouse may be projected to receive down the road may not be considered as marital property.

A judge often doesn’t split assets down the middle 50-50. They instead use a complex formula that takes into account the length of the marriage and the contribution of each spouse to it. Any divorce settlements that involve a spouse agreeing to receive stock options should have a provision. It should clarify that the recipient husband or wife is only receiving a present-day payout and not any future dividends that may come through in the future.

Individuals who receive compensation in the form of commissions and perks are much like those who receive bonuses and stock options as pay. A husband or wife who received these as compensation may agree to leave these to their spouse instead of other property.

If you are thinking about doing this in your divorce case, then you may benefit from speaking with an attorney. They can help you negotiate the terms of your agreement so that you don’t leave your future earnings to chance.