In a recent case, In re Marriage of Wendt, the Appellate Court ruled no. The Appellate Court held that a non-vested discretionary bonus accrued during the marriage, but received after entry of a judgment for dissolution of marriage, is not marital property.
Bonus Accrued During Marriage but Non-Marital Property?
The parties filed for divorce in July 2010. Scott Wendt, a software developer for Citadel, received a considerable bonus payment for 2008, but it was not paid until early 2009. Scott received no bonus for 2009 and he received a bonus for 2010 that was payable in 2011 and one for 2011 that payable in early 2012. In September 2012, the trial court entered a Judgment for Dissolution of Marriage with an accompanying Marital Settlement Agreement. Additionally, the trial court entered an order awarding Scott’s 2012 bonus payable in early 2013 to him after a finding that it was his non-marital property. Scott’s wife, Allison appealed the decision to the Illinois Appellate Court. The Court affirmed the trial court’s decision and held that Scott’s 2012 bonus was non-marital property.
So why was this bonus considered non-marital property?
The issue turned on the fact that the bonuses that Scott received were not guaranteed, and were not spelled out in an employment contract as a contractual benefit. Rather, the bonuses were purely discretionary and analogous to accrued vacation and sick time, which the Court has identified as non-marital property because of its speculative nature.
Bonuses were Discretionary and Not Tied to Husband’s Job Performance
The Appellate court distinguished Scott’s bonuses from non-vested pensions, stating that employees have contractual rights to a non-vested pension under an employment agreement. Whereas, Scott’s agreement with Citadel provided that all bonuses were discretionary and depended on factors other than Scott’s performance, such as the overall performance of the company. Additionally, even though Scott received bonuses for 2008, 2010, 2011, and 2012, Scott did not receive a bonus for 2009 and contributed the lack of such bonus to the overall performance of the Company, which was a factor out of Scott’s control.
Taking those facts into consideration, the Illinois Appellate Court found that Scott’s bonus was his non-marital property.
Consult with an Experienced Chicago Divorce Attorney
Dividing assets in an Illinois divorce can be complicated, especially when a couple has multiple retirement investment accounts that include a mix like bonuses, pension plans, and 401(k) accounts. Be sure your rights to and share of pension plans, 401(k)s and any bonuses are protected in your divorce. Feel free to contact Anderson & Boback when you need trusted legal advice a Chicago family law attorney with extensive experience in dividing retirement accounts in divorce.