Most people preparing for divorce in Washington disagree with their spouses about at least a few property matters. Some people argue over who should stay in the marital home. Others may disagree about how to share credit card debt.
The more marital property people share, the longer and more intense fights about asset division could become. A higher standard of living and more complex holdings can make it more challenging to divide what they own and owe. For example, professionals in well-compensated positions may have as-of-yet unpaid compensation that they want to protect in a divorce.
Deferred compensation could include performance-based bonuses, retention bonuses and restricted stock units. Someone’s deferred compensation could be worth thousands of dollars. It is normal for a professional to want to protect those resources and for a spouse to seek a fair share of them during the divorce process. Yet, the specifics of what portion of such compensation is divisible depends on a couple’s unique circumstances.
Some deferred compensation could be divisible
The terms of someone’s employment contract and the timing of the divorce will determine whether or not their deferred compensation is subject to division. The Washington rules about divorce require that people split their resources fairly and equitably. During litigation, judges can potentially split anything that either spouse earned or acquired throughout the marriage.
Deferred compensation may represent future income, but it is income that someone at least partially accrued during the marriage. Therefore, at least a portion of the deferred compensation could be part of the marital estate. Spouses may have to negotiate both what portion of the deferred compensation they will share and what that compensation is worth.
Restricted stock units, for example, can be hard to accurately value, particularly if the company has not yet had its IPO. Some people will include terms protecting their deferred compensation and marital agreements or prioritize addressing their compensation during negotiations.
Those with more complex compensation packages and more overall personal property usually feel like they have more to lose during divorce and may need to plan more carefully as a result. Ultimately, seeking legal guidance to properly identify which assets are subject to division can help someone attain the best possible outcome to property division matters in a high-asset Washington divorce.
