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How to handle compensation when divorcing an executive

On Behalf of | Sep 15, 2022 | Divorce

At first, the thought of divorcing an executive or person in a similar role might sound like an easy payday. However, many in this situation learn that divorcing someone well-off in Indiana is more complicated than they think. With that in mind, here are a few compensation-related tips to remember when divorcing an executive.

You might need to dig deep

Because most aren’t fortunate enough to receive executives’ extremely large salaries, they might not know that paying an executive is typically complicated. For instance, compensation plans for executives usually won’t appear on their respective tax returns. Your soon-to-be ex-spouse might have also used their income to invest in cryptocurrency, something that’s not entirely easy track and report.

Timing is everything

Considering many executives receive stock options, it’s important to note these assets have vesting periods. A vesting period is the amount of time someone must stay with a company before cashing out a stock or similar assets. In most cases, even a divorce won’t alter a company’s vesting periods. If you want your share of these assets, it’s good to know if your ex can even cash out their stocks in a divorce.

Losing an executive role

Should the executive lose their job voluntarily on involuntarily, some aspects of an executive compensation plan may be off the table depending on the initial agreed-upon terms. As a result, this may affect how much you might receive during the divorce.

Divorcing a wealthy executive can involve a lot of steps. Considering that, prepare to wait months or years until the court finalizes your divorce. However, if handled properly, you could walk away from your divorce with considerable compensation.