Not everyone simply earns a paycheck for the work they do. You may be one of the numerous employees here in California who earns your income through other means. Yes, you get a paycheck, but you get more than that.
If you end up going through a divorce, you will need to divulge all your sources of income. Since California is a community property state, those other sources will more than likely end up as part of the marital estate.
How divorce affects certain income sources
If you receive one of the following sources of income, you could end up having to split it with your future former spouse:
- If you work on commission, the date you receive particular commissions becomes crucial. The other party could argue the work for the commission occurred prior to the divorce, but you could argue that it wasn't guaranteed until the deal actually closed, which was after the date of filing.
- If you earn a bonus that applies to the work you did in the previous year and prior to the divorce, you must count it as income divisible in the proceedings. However, your spouse may also claim it counts toward your total income when calculating spousal and/or child support.
- The court could count any stock options you earn through your employment as marital property unless you can prove they are separate property.
- If you enjoy any perks through your employment that benefit your family, such as a vehicle or housing, the value of those assets may count as income for the purposes of the divorce.
- If you own a business, the company should pay you a salary comparable to one any non-owner would receive. This will help determine your income more easily.
You should not attempt to lower your income in the anticipation of a divorce. The court will go back further to determine your real income. Moreover, you could be accused of attempting to defraud the court. Under these circumstances, disclosing your true income would more than likely cost you far less.
If you do receive any of the above or some other form of compensation for your employment, you may benefit from gaining an understanding of how the court will treat it when it comes to determining your income. You have rights when it comes to the property division process, and protecting them would probably go smoother with the help of an experienced attorney.