Executive Compensation In Ohio Divorces.pdf
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For executives facing divorce, property division is often fraught with challenges. Learn more about the many considerations involved in these high-stakes cases, including common types of executive compensation and potential strategies for achieving successful outcomes.
Executive Compensation In Ohio Divorces.pdf
- 1. Executive Compensation In Ohio Divorces Presented by
- 2. The Complexities of Executive Divorce โข Divorce is a challenging transition, especially for high-net-worth couples โข Addressing executive compensation adds another layer of complexity to property division
- 3. โข Ohio law mandates equitable distribution of marital property โข โEquitableโ means fair, not necessarily equal โข Prenuptial agreements may impact property division Equitable Distribution in Ohio
- 4. Marital vs. Separate Property Marital property: โข Includes assets and debts acquired during marriage, regardless of title โข Subject to equitable distribution under Ohio law Separate property: โข Includes inheritances, gifts and pre-marital assets (provided theyโre kept separate) โข Generally not subject to division โข Proper identification and valuation are crucial
- 5. Executive Compensation Types: Beyond Salary โข Qualified retirement plans such as 401(k)s and 403(b)s โข Nonqualified retirement plans such as supplemental executive retirement plans (SERPs) and individual retirement accounts (IRAs) โข Defined benefit plans such as pensions and cash balance plans โข Profit-sharing plans (PSPs) โข Long-term incentives such as deferred compensation plans, restricted stock units (RSUs), stock options and long-term incentive unit awards โข Golden parachutes Each type has unique considerations for divorce. Marital vs. separate property determinations may factor into all of them.
- 6. Retirement Plans โข Qualified plans: Governed by ERISA,1 division through QDRO2 โข Nonqualified plans: More flexibility on division, but may require complex strategies Both types require addressing tax considerations.
- 7. Defined Benefit Plans Pensions: โข Guaranteed payout based on salary and length of employment โข Complex valuation of future benefits โข Require QDRO for division Cash balance plans: โข Individual account with employer contributions and interest credit rate โข Potentially divisible via QDRO โ lump-sum or continued benefits โข Division must comply with plan terms and conditions
- 8. Profit-Sharing And SERPs PSPs: โข Deferred compensation โข Allocate incentives to an individual pretax account โข Vesting considerations โข Division depends on plan parameters SERPs: โข Additional retirement benefits beyond qualified plans like 401(k)s โข Complex valuation and tax considerations โข Complex division strategies like constructive trusts or offsetting value with other property
- 9. โข Deferred bonuses, RSUs, stock options โข May represent a significant portion of executive compensation โข Subject to vesting requirements โข Involve greater uncertainty in valuation โข Constructive trusts as possible tool for division Long-Term Incentives
- 10. Golden Parachutes โข Severance packages for involuntary job loss โข Commonly built into executive employment agreements โข Often combination of cash bonuses, stock options and other benefits โข Inherent uncertainty makes them difficult to address โข Require financial experts and strategies like constructive trusts
- 11. Partnering With the Right Professionals โข Importance of sound legal and financial guidance in executive divorces, for both the executive and non-executive spouse โข Work with attorneys who understand the nuances of executive compensation in Ohio divorce
- 12. For more insights, view the full paper for free on our website. Footnotes: 1 Employee Retirement Income Security Act of 1974 2 Qualified domestic relations order The content of this paper is provided for informational purposes only and does not constitute legal advice. ยฉ 2025 Zachary D. Smith, LLC. All rights reserved. Design and editorial services by FindLaw. Call our firm: 513-275-5367 | Visit our site: www.zdslaw.com Share this white paper: