Non-Traditional Benefits that Must be Considered in a Divorce
Dec 5, 2018 | Written by: Share|
You may think that you only need to consider traditional income to determine alimony, child support and equitable distribution, but you may be overlooking significant perks or other benefits that could have a substantial impact on those issues. Failing to consider these non-traditional benefits could significantly affect your bottom line. Identifying and discussing these perks and benefits with your attorney is critical.
- Find out what perks and employee benefits are available to your spouse. Does your spouse receive healthcare insurance, vacation or paid time off, performance bonuses, paid sick days, or retirement plans? Each of these items or perks has a value that needs to be considered in calculating support, available income, and possibly custody and parenting time plans.
- When conducting discovery, ask for employee handbooks, policy manuals, agreements, pay stubs, IRS forms, retirement plan documents, stock purchase/options, grant letters, company financial statements, etc.
- Does your spouse participate in or have stock-based compensation? It is critical to understand the dates of the grant, plan participant statements, complete plan documents, grant award statements or agreements, vesting periods and requirements (such as continued employment or other contingencies), and tax implications.
- Is your spouse’s deferred compensation plan qualified or non-qualified? Qualified plans are most commonly referred to as 401k, 403b, profit sharing plans or SEPs. Non-qualified plans are tax-deferred and are not constrained by contribution limits. A QDRO (Qualified Domestic Relations Order) is used in the division of qualified deferred compensation plans to divide the assets in a divorce, and a DRO (Domestic Relations Order) is used for non-qualified plans. When a non-qualified plan is involved, additional discovery may be required, as these plans are more complex to address than traditional qualified plans.
- Does your spouse have a pension? Pensions are often overlooked as another form of compensation.
- Does your spouse receive perks/reimbursements such as a car allowance, life insurance, gasoline reimbursement, marketing expenses, insurances, dues, licensure, meetings, seminars, travel, computer, phone, lease, meals and entertainment, office supplies, cash, etc.? Are these paid directly by the employer or is your spouse reimbursed?
- Has your spouse made a loan to an employer or closely held business? What are the terms of that loan? Is this first-time loan incidental to a divorce or is this something that historically occurred during the marriage?
- Has your spouse prepaid or overpaid taxes to attempt to hide available funds in anticipation of a divorce?
This above list is a starting point and is not exhaustive; your attorney can help you identify possible perks and benefits based on the particular circumstances of you and your spouse.
Diana Fredericks, Esq., is a partner with Gebhardt & Kiefer, PC and devotes her practice solely to family law matters. She is a Certified Matrimonial Attorney and was named to the NJ Super Lawyers Rising Stars list in the practice of family law by Thomson Reuters in 2015, 2016, 2017, and 2018, and to the New Leaders of the Bar list by the New Jersey Law Journal in 2015. Contact Ms. Fredericks for a consultation at 908-735-5161 or via email.
If you have a suggestion for a future blog topic, please feel free to submit it via the Contact Us form.