Earning an annual bonus often comes from a lot of hard work, long hours, and dedication. So, it’s completely natural to feel concerned about having to share it with your ex-spouse after a divorce. You are not alone, one of the common questions we hear is: Will my annual bonus count in my divorce financial settlement?
The answer in short is that it depends. In this article specialist divorce and finance lawyer Lucy Theobald highlights some of the considerations.
How family law treat bonuses in divorce
When dividing finances after a divorce, the court looks at a number of factors under Section 25 of the Matrimonial Causes Act 1973. This includes “the income, earning capacity, property, and other financial resources” that each person has now or might have in the future.
That means bonuses are very likely to be considered in your settlement. However, the final decision depends on your specific circumstances, and the court’s goal is to make things fair while meeting both your and your ex’s financial needs (especially if children are involved).
The process usually involves:
• calculating what resources are available to the divorcing couple – so the existence of or expectation of a bonus needs to be disclosed
• distributing those resources – and this when the treatment of a bonus may differ.
If you’ve already received the bonus
If you’ve already got the bonus in your account then this is how it is likely to be treated.
Bonuses received while you were married are usually seen as marital assets. These are typically shared, though not always equally—it depends on factors like each person’s needs and contributions.
If you earned the bonus after separating, it may be treated as non-marital and you could keep it. But if your ex needs financial support and there isn’t enough money in the pot to meet everyone’s needs, your bonus might still come into play.
The key point is whether the bonus is needed to cover reasonable expenses like housing or income for both parties. If everyone’s needs are already met, the court is more likely to let you keep what’s left.
Future Bonuses after separation and divorce
Future bonuses—those you haven’t earned yet—are usually treated as part of your income, rather than a capital asset like savings or property. This means if your ex is claiming spousal maintenance, the court might take your bonus into account as part of your overall earnings.
Bonuses can be tricky because they’re often unpredictable. They might be tied to performance or vary year to year. To address this, courts sometimes allocate a percentage of future bonuses for spousal maintenance, but they usually cap the amount to keep things fair.
For example, in one case, a judge ruled that a spouse’s basic living costs would come from regular salary, while maintenance would be “topped up” with a share of their bonus—up to a certain limit.
Plan for deferred or non-cash bonuses
If your bonus includes deferred elements like shares or stock options, these may not be immediately accessible. Highlighting this in discussions can help ensure fairness by preventing settlements from disproportionately relying on income you can’t yet use.
With professional guidance, you can navigate these complexities and find a solution that protects your long-term financial stability.
What really matters during the divorce process?
The court’s primary concern is ensuring that both you and your ex have the financial resources to meet reasonable needs, such as housing and living costs. If these needs are fully met through other parts of the financial settlement, it’s more likely that your bonuses will remain untouched.
By negotiating a settlement that fairly addresses your ex’s needs, you can help protect your future income while ensuring they’re provided for.
Work with specialist divorce lawyers
Divorce settlements can feel overwhelming, especially when bonuses and other variable income are involved. That’s where we come in. At The Family Law Company, our team has the expertise to guide you through the process, ensuring your settlement is fair and takes all the relevant factors into account.
Understanding the question will my annual bonus count in my divorce financial settlement is not straight forward. If you need legal support on how bonuses and other financial assets are treated in divorce, get in touch with us today and one of our specialist divorce and finance team will be able to help.
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