As we’ve discussed before, CA is a community property state. In short, this means that if a married couple gets divorced, everything they accrued, including all assets, valuables, and money, is split equally and fairly between both parties. 

Some assets are easier to divide than others. For example, investment accounts, stocks, cryptocurrencies, and other complex forms of assets can be more difficult to calculate. Deferred compensation is one of those assets that falls on the more complicated side of things. 

In large part, this is due to the fact that as the name implies, deferred compensation is a delayed form of payment that can carry a wide range of variables.  

Defining Deferred Compensation

A deferred compensation arrangement is a type of contract that stipulates a payment to an employee at a later date. These can take many forms and include many caveats, such as requiring specific performance targets to be hit or requiring that an employee remain at a company for a given period of time. Thus, divorcing spouses might disagree as to what is or isn’t a marital asset if the payment is scheduled in the future.

Another complicating factor is that the exact value of a deferred compensation isn’t always clear cut. These payments may take the form of stock options, or may be contingent on the success of the company at the time of payout. Once again, this can cause a rift between divorcing spouses who disagree on the value of the total compensation. 

Family law courts have the same problem as well. They simply can’t quickly and easily divide something that someone currently does not possess. At times, this may require a spouse to offset the value of the deferred payment with other assets, as neither spouse is currently able to access those funds. 

Talk to a Trusted Family Law Attorney About Asset Division in CA Today

Anyone who has a deferred compensation plan, or any other form of complex asset in CA, needs to consult with a family law attorney to prepare ahead of time. There are ways to proactively address how these types of assets should be distributed, and this process starts by consulting with a qualified family law attorney.

Trust the decades of experience at the White Oak Law. Call us today at  925-271-0999 to learn more about how our team of experts can help. Whether you’re dealing with complicated asset division proceedings, or other family law issues such as custody or alimony disputes, know that we are here to help.