Texas Supreme Court Rules on Whether Bonus Earned Before Divorce, but Paid After, is Community Property

Texas Supreme Court Rules on Whether Bonus Earned Before Divorce, but Paid After, is Community Property

The distinction between separate and community property under Texas law might seem simple. Assets acquired while a couple is wed are generally owned in equal shares by both spouses regardless of which one brought the asset into the household. Property obtained by one party before the marriage or following the divorce stays with that individual. There are situations where pinpointing the date an asset was acquired can be complicated. A case in the state’s Supreme Court addressed the proper classification of a work bonus earned during the marriage, but collected after the divorce. 

Hakan Oksuzler worked for Bank of America and had been married to his wife, Lauren, since 2010. As part of his job, Hakan received an annual bonus that was linked to both his performance and the company’s. The bonus typically included both cash and stock, and was awarded around February 15 of the following year. 

Sometime in November 2019, Hakan’s manager recommended a bonus totaling $140,000 in cash and equity. This amount was approved by the bank’s board of directors in January 2020 and presented to Hakan the next month. On December 9, 2019, the divorce between Hakan and Lauren Oksuzler was finalized. However, a dispute still existed about the disposition of the 2019 bonus. Both the trial and appellate courts ruled that because the award was made after the marriage, it should be classified as separate property. 

In a case captioned In re J.Y.O., the Supreme Court of Texas reversed that holding. The justices stated that because the discretionary bonus was earned by Hakan for work performed during the marriage, it is considered community property. According to the decision, salaries and bonuses are dated according to when the right to the compensation arises, not when the payment is actually made. To support this principle, the Court noted that if the date of payment were used, divorcing spouses could game the system during a property division dispute by deferring compensation until the marriage was legally dissolved. 

Before you start the divorce process, you should speak with a knowledgeable Texas attorney regarding the disposition of community property and any potential conflicts about whether a particular item is a separate asset.  

Grob & Associates Law Firm PC in Rockwall and Wylie provides strong advocacy for North Texas residents who are going through a divorce. Please call 972-777-5701 or contact us online to schedule an appointment. We offer a free consultation for family law matters.    

Texas Supreme Court Rules on Whether Bonus Earned Before Divorce, but Paid After, is Community Property

The distinction between separate and community property under Texas law might seem simple. Assets acquired while a couple is wed are generally owned in equal shares by both spouses regardless of which one brought the asset into the household. Property obtained by one party before the marriage or following the divorce stays with that individual. There are situations where pinpointing the date an asset was acquired can be complicated. A case in the state’s Supreme Court addressed the proper classification of a work bonus earned during the marriage, but collected after the divorce. 

Hakan Oksuzler worked for Bank of America and had been married to his wife, Lauren, since 2010. As part of his job, Hakan received an annual bonus that was linked to both his performance and the company’s. The bonus typically included both cash and stock, and was awarded around February 15 of the following year. 

Sometime in November 2019, Hakan’s manager recommended a bonus totaling $140,000 in cash and equity. This amount was approved by the bank’s board of directors in January 2020 and presented to Hakan the next month. On December 9, 2019, the divorce between Hakan and Lauren Oksuzler was finalized. However, a dispute still existed about the disposition of the 2019 bonus. Both the trial and appellate courts ruled that because the award was made after the marriage, it should be classified as separate property. 

In a case captioned In re J.Y.O., the Supreme Court of Texas reversed that holding. The justices stated that because the discretionary bonus was earned by Hakan for work performed during the marriage, it is considered community property. According to the decision, salaries and bonuses are dated according to when the right to the compensation arises, not when the payment is actually made. To support this principle, the Court noted that if the date of payment were used, divorcing spouses could game the system during a property division dispute by deferring compensation until the marriage was legally dissolved. 

Before you start the divorce process, you should speak with a knowledgeable Texas attorney regarding the disposition of community property and any potential conflicts about whether a particular item is a separate asset.  

Grob & Associates Law Firm PC in Rockwall and Wylie provides strong advocacy for North Texas residents who are going through a divorce. Please call 972-777-5701 or contact us online to schedule an appointment. We offer a free consultation for family law matters.    

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