As you prepare for divorce, you wonder what will happen to your restricted stock units (RSUs) and bonuses. Will you keep them all, or does your spouse have a right to claim them? Understanding Florida property division laws is crucial to protecting your high net worth assets.
Why executive compensation starts divorce disputes
Your compensation as an executive goes beyond a standard base salary. Often you will receive RSUs, deferred bonuses and performance shares, which form the largest portion of your wealth. However, disputes tend to emerge once you consider the date you acquired these assets.
In Florida, property division laws mandate that all assets or income you earned during the marriage count as marital property to the extent it compensates for work performed during the marriage. If you received a stock option or commission while married to your spouse, the portion you earned is fair game for division.
How courts handle high-value assets during division
Despite the complexity of the matter, the courts in Florida find ways to split executive compensation equitably between spouses. A judge may use these methods:
- Honor marital agreements: A judge follows the terms a couple has agreed and written on a prenuptial or postnuptial agreement.
- Calculate using Time Rule Formula: A judge determines the marital portion of unvested stock grants by dividing the time between the grant date and the divorce cutoff date by the total vesting period.
- Offsetting marital assets: A judge chooses to award the executive compensation to the working spouse and give the other marital assets to the non-employee spouse.
High-asset property division often requires a lengthy waiting period. Forensic accountants still have to appraise the values of each executive asset.
What you can do to maintain fair division during divorce
Learning that your compensation can be subject to division can be overwhelming. As much as you want to protect your assets, you have to ensure that your financial disclosure mentions everything. If the courts find that you intentionally hid them, you can face consequences that hurt your share.
Because high-asset divorces can be difficult to navigate alone, seeking legal counsel is advisable. You can ask an experienced divorce attorney about options for protecting your wealth.