Executive Divorce: Key Considerations for Asset Division

Every Orange County family law matter can be challenging, but if you or your spouse is an executive with considerable income, the matter of property division can become especially complex. Because this division reflects your financial rights and will directly affect your financial future, getting it right is paramount. Working closely with an experienced Orange County asset family law from the start is always advised.

California Is a Community Property State

When it comes to an Orange County family law matter, California is what is known as a community property state. This means that everything you and your spouse acquired, with a few exceptions, during your marriage belongs to each of you equally and must be split evenly between you in the event of a divorce. It does not matter who made the purchase in question, whose name is attached, or who claims the asset as their own – if you came to own it while you were married, it is almost certainly classified as community property in the State of California., unless it was inherited, received as a gift, and/or acquired with separate property.

The Only Exceptions to the Rule

The only exceptions when it comes to identifying assets as community property in Orange County divorces include the following:

• Any inheritances either of you received in your name alone
• Any gifts either of you received in your name alone – including any gifts either of you gave the other
• Recoveries from any personal injury settlements that was initiated during the marriage are generally awarded to the injured spouse.

The Matter of Separate Property

Anything that either of you owned prior to marriage and kept separate while you were married is the original owner’s separate property. There are some important points that need to be made here, however. The State of California begins with the presumption that all assets are community property if acquired during the marriage, which means that, if either of you lays claim to a separate asset, the burden of proving its separate nature lies with that spouse if it was acquired during the marriage. Further, the line that distinguishes between separate and community property can be blurred by any financial commingling, which is not uncommon in marriages.

The Date of Your Separation

The date of your separation determines when the assets that you and your spouse acquire are no longer classified as community property. This date can be especially important in an executive divorce – in which your earnings are high and additional factors, such as bonuses, RSUs, stock options, and other forms of compensation are likely to play a significant role.

This separation date is generally marked by one of the following:

• The day that either spouse moves out of the family home and clearly states that the relationship is over
• The day that you and your spouse come to the mutual agreement that your marriage is over

Documentation of any events relative to separation may be important to avoid “he said-she said” litigation.

Financial Considerations that Are Specific to Executive Divorce

As a business executive, your pay may not be structured the same way it is for the vast majority of other employees. This fact heightens the complexities of property division in your Orange County family law matter, and there are several primary factors to take into consideration.

Your Compensation

In your executive position, you not only bring in a higher income but may also have a healthy compensation package, which can be complex in its own right. Protecting your financial rights in divorce is key, and one of the most important steps you can take toward achieving this goal is having an experienced, Orange County family law attorney in your corner.

Ownership and Control

In some Orange County family law matter, ownership and control of the business in question comes into play, and when this is the case, careful legal analysis is required.

Your Bonuses and Beyond

There is also the matter of your bonuses, stock options, RSUs, etc., to account for and address, which includes assessing for issues such as the following:
Whether your executive rights have been fully vested

• Is the vesting time and performance
• The class and amount of the shares you own
• When the compensation in question was earned

These are challenging concerns that can have a significant impact on the outcome of your case should be addressed by an experienced Orange County family law attorney.

Your Retirement Accounts

When it comes to family matters in Orange County, there are exacting legal standards relative to the distribution of retirement assets, including pensions and retirement accounts. While the value you held in these that existed in these accounts on the date of marriage and the earnings on those funds is generally considered a separate asset that belongs to you alone, the contributions made after the date of marriage are community property, which must be divided between you equally.
In a high-asset Orange County family law matter like yours, you have more options when it comes to addressing retirement assets. For example, there is likely to be enough property involved to offset your spouse’s ownership in your retirement accounts – or you could buy their share out upfront – which can help simplify what could otherwise be a complex legal matter. However, this is generally not advisable. Buying pre-tax assets with post tax assets generally is not financially wise.

Your Financial Portfolio

As a business executive, you are likely to have a robust financial portfolio that may include a wide range of investments, real estate, and insurance policies – in addition to your stocks and bonds. There is also your personal property to consider, including collections, artwork, jewelry, watches, and anything else of value that you own. Each of these assets will need to be valued. A family law matter is a division of the assets in a partnership.
Tax Implications

Finally, there is the matter of the tax implications associated with the proposed property division to consider. The more considerable the assets, the more serious – and the more complex – the tax implications are likely to be. It is important to understand the tax issues in an Orange County family law matter. However, the court does not have the jurisdiction to discount the value of an asset by the embedded tax unless the tax is specific, immediate, arising out of the divorce and not speculative.

You Need an Experienced Orange County Asset Family Law Attorney on Your Side

The division of community property in an Orange County family law matter has the potential to be the most hotly contested term, and when executive earnings are involved, the matter can be amplified. The focused Orange County family law attorneys at Minyard Morris dedicate their impressive practice to helping valued clients like you protect their assets in advantageous case resolutions, and we welcome the opportunity to also serve you. For more information about what we can do to help, please don’t put off reaching out and contacting or calling us at 949-724-1111 today.