Relocation Bonus Was Marital Since Decision to Move Made During Marriage
Kentucky case summary on property division, classification and relocation bonus in divorce.
The husband and wife in this Kentucky case were married in 1999 and had four children. In 2016, the wife filed for dissolution of marriage. The case proved contentious, and in 2017, the husband asked for permission to move with the children to Texas. He worked for Toyota and the job was being relocated. He alleged that the relocation did not come as a surprise, since they were both aware of it since moving to Kentucky. He asked the court for an order requiring the wife to cooperate in selling their house through Toyota’s relocation program.
A hearing was held before Judge Linda R. Bramlage in March 2017.
The court allowed the move and named the husband the primary residential parent.
In a later agreed order, the wife was ordered to cooperate in the sale of the house. The husband was to take a $70,000 equity advance, and the first $70,000 of profit would go to the wife. Remaining profits would be divided equally. They also agreed to split the costs of needed repairs. Both parties and the children then moved to Texas separately.
Later that year, the wife filed a motion to determine whether the Kentucky court still had child support jurisdiction.
In 2018, the court issued a supplemental order. It incorporated a settlement agreement and decided other issues in the case. The main point of contention was the status of bonuses that the husband had received as a result of his relocation. The court characterized a $27,000 bonus in 2016 as marital property, since the husband had used $15,000 of that amount to pay off marital debts. A $40,000 bonus received in 2019 was categorized as nonmarital property. Some other bonuses were categorized as marital property.
The husband appealed to the Kentucky Court of Appeals and raised several issues, including the status of the relocation bonuses.
After discussing jurisdictional issues, the court turned to the relocation bonus. The husband categorized the bonus as “future income,” which would mean that it was his separate property. But the trial court had pointed out that it had been received in 2017, before the final decree was entered.
On this point, the husband argued that future events could possibly require him to pay back the bonus. He pointed to his contract, which identified the bonus as being for “future services.” Under the contract, he would potentially have to pay back some or all of the bonus as late as 2019, after the marriage had been dissolved.
The court cited an earlier case stating that the operative factor was not whether vesting had occurred. Instead, the focus was on whether the benefit had accrued during the marriage. In this case, the Court of Appeals agreed with the lower court that the right to receive the bonus was earned during the marriage, based upon his willingness to relocate. The decision was made during the marriage, and therefore, the bonus was earned at that time. The court noted that the likelihood of repayment was slim. For these reasons, the appeals court agreed with the lower court that the bonus was marital property.
After addressing other issues in the case, the appeals court affirmed in part, reversed in part, and remanded.
No. 2018-CA-000979-ME (Ky. Ct. App. Nov. 8, 2019).
See original opinion for exact language. Legal citations omitted.
To learn more, see Property Division in Tennessee Divorce.
