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General Rule for Employee Bonuses
(Provided by National Legal Research Group, Inc.)

In general, marital property is defined as property acquired during the marriage. Since most companies pay salary on a weekly, biweekly, or monthly basis, it is usually safe to assume that salary is compensation for services provided at the time it is received.

This assumption cannot safely be made when dealing with bonuses, stock options, retirement benefits, or other types of deferred compensation. These benefits are compensation for services provided before value is actually received. The most extreme case is retirement benefits, which are compensation for services beginning as long as several decades before actual receipt. Stock options are an intermediate case; most are compensation for services beginning four to six years before the date of vesting. Employee bonus programs are the shortest-term deferred compensation assets. Many bonus programs pay benefits at the end of the calendar or fiscal year; only a small number of programs go back more than two or three years.

While the period of deferral in most bonus programs is short, the cases still routinely treat bonuses as deferred compensation. Thus, they look to service over the entire period in which the bonus was earned, and not to the actual date on which the bonus was paid or received.

Information provided by:
National Legal Research Group, Inc.

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