One of the more complex and often contentious issues in a Louisville divorce involves high wage earners and property division challenges. Marital property is generally characterized as any asset or debt acquired by either or both parties from the date of the marriage until the date of separation. There are some exceptions to this including properly structured gifts and inheritances and income from separate property assets and investments.
One of the challenge with executives, business owners and other high wage earners and property division in a Louisville divorce often revolves around the issues of stock options. Stock options occur when a company offers high performing or executive personnel the opportunity to purchase stock in the company for a period of time in the future (usually between one and five years) for the price of stock at the day the option is given. There is often a “vesting” period associated with stock options as well as company benefits such as 401(k) matching programs. Vesting means the option cannot be exercised until a period of time has passed. It’s like earning the right to buy the option after staying with the company for a period of time (i.e. the vesting period). The three most common ways to earn vesting in a stock option are a time-based milestone, specific performance metric(s) or a combination of these two.
In some cases a party might attempt to shield or hide the stock options, thinking they were not fully vested and therefore not part of marital property. This is simply not the case. Stock options and other executive incentives tied to time or future performance are generally considered to be an asset from the moment they are received, not at the time they are redeemed. If there are stock options which are not fully vested they may need to be put in a trust until they mature. There are also tax implications for these transactions which must be weighed and balanced.
These are but a few of the challenges associated with executives and high wage earners and property division in a Louisville divorce. If your divorce will involve substantial assets such as the ownership of a business or professional practice, investments, retirement accounts, high income or collections of valuable items it is important to have highly skilled, experienced and proven legal counsel.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.