Dividing money and benefits in a high-asset divorce can get tricky, especially when one spouse has a complex pay package. Executives often make more than just a salary, which makes it harder to decide who gets what. Knowing how these benefits work in a divorce helps both spouses protect their finances.
Different types of executive pay
Executives earn more than just a paycheck. They might get stock options, restricted stock units (RSUs), delayed payments, performance bonuses, and profit-sharing. Some of these benefits won’t be available right away, which can make splitting them harder during a divorce.
What counts as shared property?
Courts figure out which parts of an executive’s pay package belong to both spouses. Money and benefits earned during the marriage usually count as shared property. Anything gained before the marriage or after separating often stays with one person. When a bonus was earned or when stock becomes available affects how courts divide these assets.
How to divide stock options
Stock options and RSUs create challenges in a divorce. Their value changes with the market, so they don’t have a set worth at the time of divorce. Courts use different methods to divide them fairly while considering when the stocks become available and when they were given.
Handling delayed payments and bonuses
Some pay gets delayed on purpose, sometimes to lower taxes. If an executive earned it while married, courts often count it as shared property. Bonuses can also be tricky, especially if they come in after separation but reward work done during the marriage
Ways to protect financial assets
Executives and their spouses should talk to legal professionals to handle these financial issues. A prenuptial agreement can make it clear how executive pay gets divided in a divorce. Without one, financial experts may need to step in to figure out fair values and division.
Understanding executive pay is important in high-asset divorces. Planning ahead helps both spouses protect their money.
