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A Better Partnership
December 30, 2009

COA Opinion: Unearned bonuses are not subject to division in divorce proceeding

On December 29, 2009, the Court of Appeals published its opinion in Skelly v. Skelly, No. 287127.' In this case, the Court of Appeals overturned a circuit court's determination that in a judgment of divorce,' a wife was entitled to a share of her husband's retention bonus, and any future bonuses he might earn at his current job.' In this case, the retention bonus involved' an installment paid by the employer in' 2007, and future payments to be made in 2008 and 2009, as long as the husband remained employed with his current employer.' These bonuses, however, were contingent, and he would have to repay any such bonuses if he left the company before a certain date in 2009.' The' trial court' ruled that all of the retention' bonus installments be divided between the divorcing parties.' The Court of Appeals, however, concluded that none of those bonus installments could be considered "earned" until the husband reached the relevant employment date in 2009ƒ''after the marriage had ended.' Thus, the Court of Appeals found that the' lower court erred, and none of the retention bonus was earned during the marriage, and thus was not subject to division.' Similarly, the Court of Appeals found that potential future bonuses were not earned during the marriage and are not subject to division.

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