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What compensation factors affect my divorce?

Like most states, Illinois relies on equitable distribution for property division. While it does not call for a mandatory 50/50 split of assets and debts, there are instances when this might happen. However, how you and your partner receive compensation from your respective employers might affect what counts as income earned at the time of the divorce.

This, in turn, might affect who qualifies for spousal support and how much. If one person makes compensation decisions in a company, that person might have the opportunity to structure compensation to benefit themselves.

Bonus paid upfront

Sometimes, employers provide a bonus upfront that employees get to keep if they meet certain requirements in the future. For instance, after getting a new promotion, a company might offer a $50,000 bonus, provided that you remain in the position for at least a year. If you resign before this time, you might need to pay some or all of it back. Forbes points out that this provision might make it possible to exclude clawback bonuses from marital property.

Bonus paid for prior work

Most employers wait until workers complete specific tasks to provide a bonus. For instance, you might receive a performance bonus in January for the work you completed during the year before. You might believe this money is yours to keep if you filed for divorce the year before, but it might become marital property, or at the very least, count toward the income earned during the marriage.

Commission earned

In most cases, workers earn a commission at the time they complete a sale. Some employers pay that money immediately or within 72 hours. Others might wait until the next pay period or the end of the month. When someone files a divorce before receiving that commission, it creates a gray area. One spouse might claim the other earned it during the marriage while the other spouse might claim commission earned only counts when paid out.

How much each party earns dictates who pays alimony and how much the receiving party becomes entitled to. This is why it is so important to determine what counts as income earned during the marriage, versus after the separation date.