In every divorce, but particularly in a high-net-worth scenario, obtaining a complete understanding of the couple’s financial situation is critical. This includes each spouse’s current compensation as well as potential future compensation (deferred compensation) which might have already been awarded in the form of stock options, restricted stock units (RSUs), non-qualified stock options, and other financial instruments.
Whether you or your spouse is a partner or an employee in a firm, the way in which that business compensates its employees might not be as straightforward as salary alone. Bonus arrangements and partnership agreements are often complex, and, as such, need thorough vetting by an experienced certified divorce financial analyst and skilled matrimonial attorney.
It is important to ask questions about your spouse’s executive compensation: Stock options, restricted stock, and other forms of executive compensation are among the easiest assets to hide, or even to “overlook.”
Many clients who are not in charge of household finances might not realize that their spouse has these potentially high-income benefits. As more companies offer varied compensation packages, it is imperative to be sure your attorney is skilled in these more complex financial matters.
For example, the top 10 companies that offer RSUs include Amazon, Facebook, Apple, Uber, IBM, Starbucks Coffee, Bank of America, Intel, Microsoft and Verizon. Lesser- known entities and many startup companies offer similarly complex compensation packages.
As your tax returns may not reflect certain compensation until it actually vests, you must have your attorney conduct the necessary financial discovery.
In many cases, your attorney can issue subpoenas to third parties, including the spouse’s employer, or obtain an authorization for certain documents, to achieve a full and unbiased financial accounting of the various forms of compensation that your spouse has and will receive, which will be the basis on which you build a case for financial support and equitable distribution. Your attorney will likely request award letters, employment offer letters and/or contracts as well as other documents.
As both a family law attorney and Certified Divorce Financial Analyst, Lisa Zeiderman has the financial expertise to ask the right questions and understands where to find the answers. She then can assist in performing a complex financial evaluation of yours and your spouse’s executive compensation to determine their worth, always keeping in mind the cost of litigation.