Divorce often comes with significant challenges, one of them being the determination of alimony or spousal support. In a high-asset divorce, however, spousal support can be even more challenging to calculate.
High-asset couples often have more forms of income than the average majority. This can include complex compensation such as stocks, performance-based bonuses, profit-sharing arrangements and more.
Sometimes, these can be hard to evaluate, which, in turn, can make it difficult to calculate a fair spousal support amount. If you are the supported spouse in this situation, here are some important things you need to know.
Types of complex compensation and how they can affect alimony
Complex pay structures in high-asset divorces often include various forms of nontraditional income. Common examples are:
- Stock options and restricted stock units (RSUs)
- Performance-based bonuses
- Deferred compensation plans
- Profit-sharing arrangements
These can significantly impact support calculations and asset division because they are more challenging to evaluate and divide compared to regular salary income.
For instance, stock options can fluctuate based on market conditions, and many of these compensation forms face different tax rules. This uncertainty can lead to challenges in setting fair and accurate support payments, as the actual value of the compensation may vary significantly over time.
Strategies for accurate support calculations
While complex earnings can make spousal support calculation more difficult, there are several ways you can ensure a fair and accurate calculation.
Consider hiring financial experts to help value complex assets and income streams. You and the other party can also work together toward a special payment schedule that accounts for future stock, RSU or bonus income.
Building flexibility into your spousal support agreement is also an important factor. Doing so will help you adjust support in case these incomes change without having to go to court. For example, instead of a fixed dollar amount, support could be set as a percentage of the paying spouse’s variable income.
Take proactive steps today
Spousal support can help you achieve financial stability and maintain the lifestyle you’ve enjoyed during the marriage. With due diligence and proper preparation, you can seek a support amount that is both fair and equitable, even with complex compensation at play.
You may also want to consider consulting a high-asset divorce lawyer. They can help navigate your specific situation, uphold your legal rights and tackle any difficulties that may arise.
