Compensation packages for executives and others in high-impact professions often include a variety of different types of pay. Deferred compensation has become a common way to incentivize both loyalty to an organization and a drive to meet specific performance metrics.
By offering to provide certain compensation after a set amount of time or based on an employee’s overall performance, a company can motivate workers to continue their employment and put in the best work possible.
Deferred compensation can often be worth tens of thousands of dollars. However, it may not be available for distribution for years. How do those preparing to divorce someone with deferred compensation arrangements with their employers handle income not yet paid to the worker?
Some deferred compensation may be divisible
Typically, married couples have to divide what they earn and acquire during the marriage. That could very well include a portion of the deferred compensation that a professional may receive in the future. It may be necessary to review employment contracts thoroughly to establish whether deferred compensation might be subject to division in a divorce.
Spouses may need assistance evaluating how much of the deferred compensation is marital property and what it is worth. Particularly in cases where the compensation may involve stock options or performance-based payments, calculating the value of the deferred compensation can be even more difficult than determining what portion of it may be part of the marital estate.
Those preparing for high-asset divorces may need help valuing and properly addressing different parts of the marital estate. Getting help early in the process can help people avoid oversights or concessions that put them at a financial disadvantage during and after the divorce.
At The Law Firm of Poppe & Associates, PLLC, our focus is relentless advocacy for our clients. If you or someone you know is considering divorce, reach out to schedule a consultation at 646-665-3903 or by contacting us online.
Let Me Be Your Brave
Mia Poppe, Esq.
Managing Partner