When high-net-worth people in Texas divorce, there can be unique complications. Many of these are related to dividing the assets and debts the couple shared. For example, executives don’t earn just a salary. Their pay is often a combination of bonuses, stock, stock options and non-financial benefits. Even uncovering the actual amount an executive takes home can be a challenge.
High-asset divorce requires particular knowledge and understanding. That’s because most wealthy people don’t earn, save or spend money in the same way others do. It can be hard to quantify all the extra forms of payment executives receive from their employers. In part, that’s because the compensation isn’t all enumerated on a paystub. Consequently, soon-to-be exes should be ready to dig for information. Some unscrupulous executives will try to hide assets during the divorce process.
How to divide it
Sometimes, an executive’s compensation is not transferable to anyone else, even to a spouse. There’s a procedure for dividing retirement accounts like 401(k)s and pensions via court order. However, things like restricted stock awards can’t be divided in that way. Instead, the executive must set up a trust to hold some of the shares with their ex-spouse as beneficiary.
The cost of the assets
In some cases, there will be tax repercussions associated with the division of assets in a divorce. For example, if stock is sold, someone will need to pay taxes. Who takes on what share of this responsibility should be outlined in the divorce agreement.
Professionals known as Certified Financial Divorce Analysts are available to assist the parties in a divorce. They can aid with the division of assets and help people make a plan for after the split. CFDAs need to complete specific training, and they can be a great addition to your team if you are divorcing an executive.