Executive Divorce in Dover, MA – All You Need To Know

High-net-worth divorce is difficult for anyone but can be even more so for hard-working executives. This is because intricate compensation packages require careful analysis for asset division and to resolve alimony and child support demands. Therefore, if you have high assets or are married to someone who does, and you are contemplating an executive divorce in Dover, MA, then here’s what you need to know.

The Impact of Compensation in an Executive Divorce in Dover, MA

Corporate executives typically receive compensation packages that include stock options, restricted stock units (RSUs), bonuses, and other forms of deferred compensation, which can complicate asset division during a divorce. Since Massachusetts is an equitable division state, marital assets, including retirement accounts, will be divided fairly but not necessarily equally in a divorce.

Asset division in Massachusetts is not decided by a formula, meaning the court will evaluate various factors. They can include how long the couple has been married, who the higher-earning spouse was, and the ages and health of the spouses at the time of divorce when determining how to distribute assets. Negotiation is thus integral to divorce. It’s important to note that spouses can negotiate the division of retirement assets through mediation, which does not require a judge.

However, if spouses cannot agree to terms, the court will intervene and decide on any unresolved issues. In an executive divorce, sticking points frequently revolve around the following.

Stock Options and RSUs

Stock options are a standard offering in executive compensation packages. With stock options, employees can purchase company stock at a fixed price upon meeting specific conditions, including when the stock will vest. Due to the timing involved in their valuation, asset division is not straightforward, particularly if the options have not vested by the time of divorce.

Restricted Stock Units (RSUs) differ from stock options in that they’re actual shares awarded to executives. That said, they cannot be sold or transferred until they vest. While RSUs are generally easier to value than stock options, the timing of when they vest can still affect how they are divided during a divorce. Unless stock options or RSUs vest during the marriage, which would likely categorize them as marital property, their status could be up for debate.

Deferred Compensation and Bonuses

Bonuses or other deferred payments based on work performed after the marriage are usually considered separate property. Depending on when it was earned, deferred compensation may still be considered marital property, even if it’s received after the divorce or after the filing date.

On another note, it’s no secret that deferred compensation, including bonuses, can be substantial. Since compensation is a significant determinant in alimony and child support decisions (more on these issues below), a court can consider deferred compensation when calculating the support one spouse owes the other.

Parenting Plans and Relocation

Creating a fair parenting plan in executive divorces can likewise present challenges.  The demands of their professional obligations, including hectic work schedules and unexpected travel amid parenting responsibilities, can make sticking to a parenting plan hard. A parenting plan should thus reflect the executive’s work commitments while still prioritizing the children’s best interests.

On a related note, many executives face the possibility of relocation. Relocation can pose a significant issue in an executive divorce, especially when job transfers, promotions, or new opportunities require executives to move far away. Massachusetts law mandates custodial parents seek the other parent’s consent or court approval before relocating with children if the move impacts the children’s schooling or emotional well-being. When custody arrangements are threatened, it can lead to conflict.

Getting Started on Your Executive Divorce in Dover, MA

As the higher-earning spouse who’s moving toward divorce, it’s natural to be afraid your financial world is about to be flipped upside down because you’ll have to support your spouse for the rest of your life. There are two things to keep in mind:

Confront the Issue Quickly

If you believe there’s a decent chance you’ll get divorced, it’s important to take action sooner rather than later. Filing for divorce sooner can effectively limit the length of your marriage, which generally impacts the duration of alimony.

The longer the marriage, the longer you may have to pay alimony. Additionally, incomes often rise over time. We’ve seen cases where individuals ignored the situation, only to find themselves worse off five or ten years later because they’re earning significantly more by the time they file for divorce.

Bottom line: Don’t bury your head in the sand. If divorce seems likely, consult an attorney and start planning now.

Avoid Manipulating Your Income

Some people, particularly those who are self-employed, try to manipulate their numbers to reduce their alimony obligations. While it can be tempting, you are best off not engaging in “funny money” tactics with your income.

The problem is that this behavior is often easy to uncover. Opposing counsel can conduct depositions, subpoena records, and identify patterns that reveal income manipulation. If caught, you risk severe financial penalties, losing credibility with the court, and being in a worse position overall.

Credibility is key in court. If the judge believes you’ve manipulated your income, it can also hurt your case on other issues. It’s simply not worth the risk. Instead, stay honest, consult an attorney, and create a strategic plan.

FAQs About Executive Divorce in Dover, MA

The following reflect common questions about executive divorces.

How do executive divorces differ from non-executive divorces?

Apart from the unique financial complexities discussed above, executive divorces are often of interest to the public, especially if they involve people holding high-profile positions. Keeping matters private might require extra measures like NDAs and sealing court documents.

What challenges can executives face when creating a parenting plan?

Due to long hours, frequent travel, and demanding schedules, executives often struggle with creating a parenting plan that balances their professional obligations with their children’s needs. Massachusetts courts prioritize the children’s best interests while considering the executive’s work commitments to create a thoughtful, flexible plan that addresses parental responsibilities and the children’s emotional health.

Will executive compensation affect alimony and child support?

High net-worth assets can influence alimony and child support calculations. Since these forms of compensation can be substantial, courts are at liberty to factor them into support payment calculations. The same holds for the type of custody the executive is awarded in the divorce.

Hire a Family Lawyer for Support in an Executive Divorce in Dover, MA

Whether you are an executive in Dover, MA, or married to one, protecting your finances and children are compelling reasons why you should speak to a family law attorney today. Even if you are unsure about filing for divorce, an attorney experienced in executive divorces can paint a picture of your future — if you stay or go.

At Farias Family Law, our team of Dover, MA, divorce lawyers understand how emotional a divorce is and can guide you every step of the way. With resources to provide divorce support, including mental health professionals, realtors, and tax professionals, we are here to provide unwavering support. To learn more about executive divorce in Dover, MA, contact us.