Is a Bonus Marital Property in Illinois?

 Posted on July 02, 2014 in Divorce

In the employment context, a bonus is compensation issued at one point in time for employment services performed at an earlier date. It typically is issued in a lump sum, and is awarded in exchange for high quality work performed by the employee. Employment contracts sometimes define how quality work is to be measured for the purpose of assigning a bonus.

In other cases, the decision of whether to assign a bonus is left to the supervisor's discretion. Because an employment bonus is actually received at one point in time, but the work that gives rise to the bonus is completed at an earlier time, apportionment of such a bonus may pose an interesting question in divorce law.

Bonuses During Divorce

How does an Illinois divorce court consider a bonus received by one spouse after the end of the marriage? This question becomes difficult to divorce courts when the work giving rise to the bonus is performed prior to the dissolution of the marriage and the employee receives the bonus after the marriage formally ends.

On one hand, because the bonus was received after the marriage, the bonus should not be considered marital property. It should be interpreted like most other employment wages, which are divided equitably only if received during the course of the marriage. On the other hand, one may reasonably view the signing bonus as marital property because, as a matter of contract law, the rights to the bonus (the quality work performed) were earned by work performed during the marriage.

In 2013, an Illinois Appellate Court considered a similar question concerning an end of year bonus. It examined a situation in which a husband worked for the year of 2012 to earn a bonus. The marriage then ended, and afterwards the husband received the bonus in February 2013. The wife argued that the bonus should be divided as marital property because it was earned during the marriage. The husband argued that the bonus should be seen as his individual income because it was actually received after the divorce judgment.

The appellate court (and the earlier, the trial court) sided with the husband, holding that the 2012 bonus received in 2013 was not marital property. The court focused on the fact that the bonus was not required but was more of an expectancy because the bonus was given at the employer's discretion. Further, by terms of the husband's employment contract, the employer should consider the employment policies of 2013 - not the 2012 policies - when deciding whether to award the 2012 bonus.

Contact an Illinois Divorce Attorney for Help

The above example shows that questions concerning the division of what may seem like marital property do not always yield clear-cut answers. Answers may depend on specific facts of individual cases. This is why it is important to retain a knowledgeable divorce lawyer during your divorce process, one who is willing to fight hard for your interests in areas where the law is unsettled. We encourage you to contact an experienced Illinois divorce lawyer at Kathryn L. Harry & Associates, P.C. to learn more about our firm. Contact us online or call 630-472-9700. We serve clients in Oak Brook, Naperville, and other surrounding areas.