We have previously written about dividing the marital home, the securities account, and the retirement accounts. For those going through a divorce, these are the usual top-of-mind categories when it comes to the division of assets. But there are usually more asset categories, including the three discussed below, that you might not think about every day. Here are three asset categories that you may need to investigate and address when getting divorced.
Restricted Stock Units (RSUs)
If your spouse has an executive-level corporate job or a sales representative position, in banking or finance or medical device technology, for example, it is likely that your spouse has restricted stock as part of his or her income stream. Restricted stock is considered deferred compensation and it is not the same as a gross wage or a bonus. Your spouse’s company determines the terms of restricted stock awarded and could change those terms on a somewhat regular basis. In simple terms, restricted stock is a source of future income to be received but that receipt is tied to your spouse’s length of employment or individual or company performance.
You will want to examine the company records to determine what restricted stock units were earned during your marriage and will be due to be paid out after your divorce. Restricted stock units cannot be transferred, you can still receive a percentage of the after-tax value of the units earned during the marriage or offset that value by dividing other property in such a way as to account for that asset.
Pension Benefits
If your spouse is a union member or a government employee, you most likely have a pension benefit to divide at divorce. Companies in a variety of other industries also offer pensions or used to offer a pension that is now closed; therefore, it is important to investigate if any benefits exist in your divorce. You will want to complete discovery during the divorce process to make sure this potential future income, which was earned during your marriage, is appropriately accounted for and divided.
You should also consider that the monthly payments provided on the most recent pension statement are estimated. The future monthly payment paid to your spouse could be more or less than what is estimated. Also, if you were awarded 50% of that monthly pension benefit in the divorce, the sum you receive each month may be higher or lower than what your spouse is paid each month based on your gender and life expectancy. If you are wanting to consider the current value of the pension benefit you could receive in the future so you can try and offset that value by dividing other property in such a way as to account for that value, you should hire an expert to do a pension valuation.
Military Benefits
If you are the non-military spouse of a current or former member of a branch of the military, you will need to investigate what, if any, benefits you receive after divorce. These benefits could include military retired pay, Tricare, and PX. The two rules to review are the 10-10-10 rule and the 20-20-20 rule. The 10-10-10 rule provides that if you were married for at least 10 years to your spouse, and during that time your spouse performed creditable military service for at least 10 years, you can have your portion of the divided military retirement pay sent to you directly from the Defense Finance and Accounting Service (DFAS) instead of from your former spouse. The 20-20-20 rule provided that for you to keep getting benefits, your spouse has to have served at least 20 years, you have to have been married for at least 20 years and your marriage and the military service have to overlap by at least 20 years. An important point for you as the non-military spouse to keeping any potential military benefits is to fill out the right paperwork and not actively waive any of your marital rights.
Should you need the advice of a divorce attorney or have questions or concerns about your situation, know that we are here to help and discuss those issues with you.