When a marriage ends, one of the most contentious issues is often the division of assets. In high-income households in and around Southfield, this can become even more complicated when one spouse receives a significant work bonus. You may have separated from your spouse, but then they received a large payment from their employer. You may wonder: Is that money ours to share? Can I claim my portion of it?

Under Michigan law, the answer is not always a simple yes or no. The core issue is not when the bonus was paid, but rather when it was earned. It is a common problem our skilled divorce attorneys tackle in Oakland County divorces, and it requires a diligent and uncompromising approach to ensure that all assets are appropriately accounted for and divided fairly.

Marital vs. Separate Property in Michigan

Michigan law operates under a principle of equitable distribution. Equitable distribution means a judge will divide marital property in a way that is fair, but not necessarily a 50/50 split. To do this, the court first needs to identify all the assets and debts that are part of the marital estate.

Generally, any property, asset, or income earned or acquired by either spouse during the marriage is considered marital property. It does not matter whose name is on the title, deed, or bank account. If the money was earned during the marriage, it belongs to both of you. In contrast, separate property is something a spouse owned before the marriage or received as a gift or inheritance and is typically not subject to division.

When Was the Bonus Earned?

When it comes to a bonus, a judge in Michigan will look past the date the money was received. They will focus on the period of time for which the bonus was compensation. For example, if your spouse’s bonus was a reward for their performance in the previous fiscal year, and that year fell entirely within the marriage, the bonus is almost certainly marital property.

A Michigan Court of Appeals case, Skelly v. Skelly, shows how important this distinction is. In that case, a husband received a retention bonus that was contingent on his continued employment after the divorce was final. The court ruled that this bonus was not marital property because he had not yet earned it during the marriage. His right to that money was tied to his future performance, not his past work. This ruling highlights why the specific terms of a bonus matter so much. A bonus for past performance is different from a bonus for future work.

What If a Bonus is for a Mixed Period?

It is common for a bonus to be based on a period that overlaps with the date of your separation. For example, a year-end bonus may be for a fiscal year that ran from January to December, but you separated in June. In a situation like this, a judge will often have to apportion the bonus, meaning it would be split, with a portion considered marital property and the rest considered separate property. The portion that was earned during the marriage, from January to June, is marital property and subject to division. The portion earned after the separation would likely be considered separate property.

The Value of Diligent Discovery

Identifying and valuing a bonus is not always straightforward, especially for bonuses that are not a simple annual lump sum, but rather a complex mix of commissions, profit sharing, or stock options. To protect your rights, we must take a diligent and uncompromising approach to discovery, the legal process of gathering financial information from both parties.

Our legal team can compel your spouse to provide pay stubs, employment contracts, and tax returns that show how their bonus is calculated. We can also issue subpoenas to their employer to get a complete picture of all compensation, including any hidden benefits or perks that are part of their income. Identifying and valuing bonuses is a battle for a fair outcome, and we are not afraid to fight for every detail.

How This Affects Spousal Support (Alimony)

Beyond property division, a spouse’s bonus can also impact spousal support. In Michigan, spousal support is not based on a strict formula but rather on several factors, including the income and earning capacity of both parties.

Bonuses and other forms of variable income are often considered when determining spousal support. A judge may use an average of a spouse’s bonus income over several years to arrive at a fair and stable spousal support amount. In some cases, a court may order a base spousal support payment and then require a separate, lump-sum payment based on a percentage of any bonus received. This legal method prevents the paying spouse from hiding a significant bonus by arguing it’s not part of their regular income.

We Will Fight for Your Share

The process of divorce can be a chaotic time, and the emotional toll of it can make it difficult to be aggressive and uncompromising in protecting your rights. That’s what we are here for. At ADAM – American Divorce Association For Men, we believe in leveling the playing field for our clients, especially when the odds seem stacked against them.

We are a law firm founded with the singular mission of providing men with diligent, experienced, and knowledgeable representation. We are not afraid to take on complex financial issues or fight for what you deserve. If you believe your spouse’s bonus is marital property, you do not have to fight this battle alone.

If you are a man facing a divorce in the Southfield or Oakland County area, we encourage you to call us for a free phone consultation at (248) 290-6675.