Divorce: Classifying, Valuing, and Dividing Executive Employment Benefits

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, July 30, 2013

Recorded event now available

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Course Materials

This CLE course will provide divorce counsel with a review of equitable distribution and income availability of executive employment benefits, including stock options, severance and executive comp, either upon divorce or for a post-judgment modification. The panel will review valuation methods for distribution and accurate assumptions on marital, pre- and post-marital assets and income.

Description

In a divorce, counsel must understand and value executive comp benefits, such as deferred compensation and severance rights. Are they vested or unvested, what are the express terms of rights, and are they the result of the efforts of both spouses during the marriage?

The practitioner must first determine whether these benefits should be considered a marital asset or income in the context of a divorce or post-judgment litigation. Once that determination is made, the practitioner must be fully versed in the valuing that right.

Counsel faces even more challenges due to the different valuation methods for different types of executive compensation — all of which may be applied depending on the facts of a particular case.

Listen as our panel, comprised of a family law attorney and financial expert, discusses and explains the different types of deferred compensation benefits, the identification, consideration and distribution of these in the matrimonial context, and the appropriate valuation methods for such rights in the divorce and post-divorce context.

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Outline

  1. Accounting/tax issues
    1. Overview of employee deferred compensation benefits: stock options, severance and executive compensation
    2. Valuation issues
    3. Using puts/calls and collars to eliminate volatility of concentrated stock positions
  2. Matrimonial/legal issues
    1. Benefits as property or a mere expectancy
    2. Deferred distribution methods
    3. Present valuation with offset
    4. Value used for support
  3. Distribution
    1. Determining the marital portion subject to equitable distribution
    2. Method of distribution of marital portion
    3. Valuation and offset
    4. In-kind distribution
      1. Transfer of title
      2. Trust device
  4. Deferred compensation and other benefits as income for support
    1. Previously distributed benefits
    2. Existing, but undistributed benefits
    3. Projection of future income

Benefits

The panel will review these and other key questions:

  • What is the difference between a vested and unvested stock option?
  • What different valuation methods can be applied to value deferred compensation benefits and under what specific circumstances should the different valuation methods be applied?
  • When should deferred compensation, severance and executive compensation rights be considered as marital assets subject to equitable distribution and under what circumstances can and/or should these rights be considered income?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Kristi Anderson Wells
Kristi Anderson Wells
Special Counsel
Gutterman Griffiths

She brings over 14 years of experience in the areas of taxation, benefits and executive compensation law to the...  |  Read More

Noah B. Rosenfarb, CPA
Noah B. Rosenfarb, CPA
Personal CFO/Holistic Wealth Coach
Freedom Wealth Advisors

He advises family lawyers and their clients on all things related to money and taxes. He is the Managing Director of...  |  Read More

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