When people think division of assets, they generally think the basics such as the family residence, 401ks, pension, checking accounts, investment accounts, rental properties. However, there are other assets that are often not considered by many.
There are a few types of deferred compensation type benefits that are often ignored in divorce proceedings. These are what some people call “fringe” benefits. They are benefits that are earned during the time of the marriage by one of the spouses thus being community property. Benefits such as vacation pay, sick leave, medical trusts, and disability payments.
Generally the court can deal with the issue of these types benefits in two ways. The court can either give the receiving spouse cash “buy out” of these benefits or reserve the right to decide on how much the benefits are worth at the time of retirement of the receiving spouse.
When deciding to either award the share of the benefits at the time of the dissolution or to reserve the right to award them at the time of retirement, the court will consider all equitable factors. One of the major factors is time. If the spouse is close to retiring, the court may wait to award the benefits. However, if the party is decades from retiring the court may order cash buy out.
Clearly, these very important assets should be considered and allocated appropriately. In cases where one spouse works for the state of California or the federal government the value of the benefits could exceed a hundred thousand dollars. These are issues that must be often brought before the courts attention in Alameda County and Stanislaus County. It is very important to speak to an attorney so you are not leaving money on the table or in this case a deferred compensation account.