Type of income stream can impact financial status after split

On Behalf of | Aug 28, 2019 | Family Law | 0 comments

Oregon residents who are going through a divorce will need to understand how their different income streams can impact their financial status after the split. While property division negotiations over income might be straightforward if a person’s income comes from a straight salary, there are other methods of compensation that can affect the result and make the negotiations more complex.

Understanding the different types of compensation is the first step towards successful negotiations that result in fair settlements. Bonuses, commissions, stock options, perks and compensation provided by a new employer, when and if these take place, are important when deciding on a negotiation strategy. Perks, for example, can be considered income, when they benefit the entire family, such as when a college professor receives housing from the university at which he or she teaches.

Bonuses are another delicate topic, particularly when it comes to when they will be received and their conditions. A bonus for the previous year’s work usually is considered income while a signing bonus with a clawback provision may be negotiated since that money might disappear, or the individual earning it might be forced to pay it back if he or she doesn’t meet the conditions of the bonus.

With commissions, the timing may be key. If commissions are paid once a deal goes through, for example, and the divorce filing happens before the commission is paid, there might be an argument for not including it as income, although it might also be argued that the work was done before the divorce. Stock options and compensation from a new job are also negotiable, and the legislation around these and how they might be split varies state by state.

People who are considering divorce might find it helpful to consult a family law attorney for information about the state rules regarding divorce settlements. A lawyer can also help individuals choose a negotiation strategy and represent them in those negotiations.