Any Ohio couple preparing for divorce can expect there to be some challenges in the process. Some spouses have a harder time negotiating with one another because their emotions are so intense. Other people may struggle with handling the details of their divorce. The more issues the two of you have to resolve, the harder it can be to negotiate a settlement that you both think is appropriate.
When one spouse in a divorcing couple is an executive at a company that has a complex executive compensation package, their work arrangements can easily complicate your Ohio divorce. What are some of the challenges involved in handling executive compensation during divorce negotiations?
Determining how much is marital property
In Ohio, judges use an equitable distribution standard for the division of your assets if you don’t settle on your own. Only the property that is part of your marital estate will be subject to division. Executive compensation packages often include terms that delay certain forms of payment.
Deferred compensation is common in executive employment contracts. For example, the business executive may receive annual bonuses based on their job performance or the company’s revenue. They may also be eligible for stock options, often tied either to their performance or how long they stay with the company.
Any deferred compensation and similar executive pay not distributed but still earned during the marriage may be part of your marital estate and therefore subject to division.
Establishing the right value for deferred compensation
When there isn’t a set amount for a spouse’s annual bonus or when he or she will receive stock in the future, there isn’t necessarily a set financial value associated with his or her executive compensation. This makes dividing those resources that much more of a challenge, as the spouses or the courts will have to establish what that deferred compensation is actually worth.
Couples in complex situations, such as marriages where one spouse is in an executive position, may prefer to attend mediation or otherwise try to settle their divorce amicably so they have more control over property division issues, like how they handle executive compensation. Identifying the biggest challenges that will arise when dividing your property in a divorce will help you establish a better foundation for the future.