December, 2025
As we begin counting down the days to the beginning of the new year, many high-income New Yorkers are carefully reviewing their financial situation. For some, bonuses may be hitting their bank accounts, their equity awards may be announced while their past equity awards are vesting. The arrival of tax documents is anticipated and many New Yorkers are already focused on the new year. This is also the time when people are starting to review their life choices, whether to get engaged, whether to sign a prenup, whether to marry, have children and even whether to separate and/or divorce their spouse.
From my perspective as a family law attorney, it is the perfect time of year to reflect about wins, losses and most importantly your financial condition. How are my investments performing? Did I spend too much? Should and can my spouse and I sit down and have an honest conversation about our finances? What if we aren’t on the same page about our finances? What if one of us is a saver and the other a spender? How do we reconcile that issue? Do we enter into a postnuptial agreement to solve for these differences? Now is the time to take stock in so many areas of your life.
If you are a high-income earner or a member of a high net worth household, the year’s end is definitely a time to make a plan to protect your finances. What should financially sophisticated New Yorker’s consider as they head into the new year? The following is a guide that focuses on exactly this question.
Review Your Compensation Package
Many high-income clients receive compensation that far exceeds their base salary or draw each year. The end of the year is often the time that your bonus is structured by your employer. In addition to your base salary, your compensation may include restricted stock units (RSU’s), stock options, a vesting structure for the stock that you received in prior years and deferred compensation. It is critical to have an understanding of your full compensation structure and your vesting schedule for any deferred compensation so that you can budget and plan for your future.
In New York, all forms of compensation earned during the marriage usually constitute marital property unless proven otherwise. What forms of compensation does this include? Bonuses for work performed during the marriage, restricted stock units, stock options, deferred compensation, profit-sharing arrangements, and sometimes a portion of incentive packages are all considered marital property, particularly if they vest during the marriage and sometimes even if they haven’t yet vested. Defining marital property can be complex in high asset marriages, so it is important to consult with a trusted professional to ensure you understand exactly what constitutes marital property in New York. If you are contemplating divorce, understanding the timing of when these assets vest or are paid can help you determine when to file for divorce or when to wait.
In my matrimonial law practice, I often see clients underestimate how much of their compensation structure is tied to long-term incentive plans. As a result, many people do not time their filing to their best advantage. It is important to gather all of the statements and documents to work with a trusted attorney so that you and your attorney can best understand how to prepare for future life transitions and avoid conflict and surprises later. I can’t emphasize enough how important it is to gather and maintain statements, tax returns and all of the other information regarding your compensation package. Being prepared will provide dividends in so many ways.
Analyze Your Spending Patterns for the Year
Unfortunately a high income does not always translate into high liquidity or even high net worth. The spending creep is very common. As you have earned more, your family’s spending may have also increased. You may not even realize it. Often, I meet with clients who have one or more spouses earning high income but when I review the assets, there is less than I would have anticipated. The fact is that families with significant income may also be paying significant expenses each year including for health care, private school, vacations, dining out and a host of other expenses. Families with significant assets often have equally significant expenses. The year end review of expenses and assets will provide a clear picture of your actual spending. This is the same reason why your financial advisor, your lawyer and New York Courts often prepare a lifestyle analysis.
If you are thinking of divorce or believe that your spouse is contemplating a divorce, it is imperative that you start to gather the important documents which include the following:
- Monthly bank and brokerage account statements
- Credit card summaries
- Investment contributions
- Child-related costs
- Household expenses
- Travel and entertainment records
This is about gaining clarity so that you can move forward with transparency and certainty. Having a clear understanding of both your family’s income stream, your assets and liabilities as well as your spending can help you realistically assess your needs for support, your ability to pay support, and what your asset structure constitutes. This will all aid you in making the most advantageous division of property and income and planning for your post-divorce lifestyle.
Timing of the Divorce Filing Matters
When you actually file for divorce can have financial ramifications. Filing in late December or early January may affect:
- Which portion of your next year’s bonus is considered marital property
- Which portion of your next year’s bonus is considered separate property
- Which fraction of your equity bonus (RSU’s) is marital and which is separate
- Whether vesting schedules fall on one side of the divorce timeline or the other
- Tax filing status for the upcoming year
The sooner you file, the more of your next year’s bonus you can protect.
Evaluate Year-End Tax Consequences
Divorce usually involves the law and finance. High-income clients should understand how divorce may affect:
- Filing status
- Capital gains on asset division
- Carryforward losses
- Exercise of stock options and vesting of restricted stock units
- Property transfers
- Dependency exemptions
- Deductibility of certain expenses
Including a financial advisor or a CDFA on your team is usually idea. Finding an attorney who will collaborate with these professionals is also very helpful. An experienced divorce attorney will likely have a host of professionals in their wheelhouse to help guide you and build out your divorce team.
Compile the Important Documents Before the New Year
If you are planning or contemplating filing for a divorce in New York, it is time to start gathering the documents that will need to move forward. The earlier the better.
Documents to collect include:
- Five years of tax returns
- Year-end paystubs
- Bonus information
- Deferred comp schedules
- RSU and stock option award letters and vesting schedules
- Brokerage account statements
- Business financials such as profit and loss statements if you are an owner or partner
- Retirement account statements
- Insurance policies including information about cash surrender balances
- Estate planning documents
These are the materials that allow your attorney to understand the full picture and develop a thoughtful strategy.
Think About Your Long-Term Financial Safety
Divorce is not only about dividing marital property, calculating alimony and support and separating physically from your spouse. It is about developing your personal plan for the future. It is about financial protection. In my experience as a New York Family Law attorney, I have found that as the year end approaches, people are making decisions about their financial future and their marriage. They often find themselves deciding if now is the time to move on from their marriage and build a new future for themselves and their children. They often find themselves evaluating if they are being treated fairly, respectfully and if they want to plan their future with their spouse or to start a new chapter.
For some, this may also be time to evaluate if they are being abused financially. Are you limited by your spouse to financial information? Are you being called names when you ask for financial account passwords? Are your credit card limits being pushed towards zero? Are you unable to access your own money? This is the time to take stock. A
Take Care of Yourself Emotionally
Family gatherings, the stress and pressures of making the holidays memorable, and financial obligations can bring on all sorts of feelings including stress and uncertainty. Planning a divorce during the holidays is difficult but frankly divorcing can be stressful generally. Being prepared definitely lightens the stress and makes you feel more at ease.
If you don’t decide to divorce, you have lost nothing by putting yourself in gathering the information, understanding your rights and being knowledgeable about your future financial picture. If you decide to move forward, you will be ready.
Booking Your Divorce Consultation
If you are contemplating a divorce or you believe your spouse is considering divorcing , making your appointment for a consultation in late December or January will get the process started and help you understand your rights under the law. It will help you organize your thoughts, understand the law and help you plan for what may be coming next. It gives you an understanding of how to protect yourself and your family during the divorce through careful preparation. Finding a trusted attorney who will advocate for you is critically important to your financial future.
Lisa Zeiderman, Esq.
New York Divorce and Family Law Attorney