deferred compensation

Hi there, 

Intangible Personal Property can be very technical to divide. 

Pensions, IRAs and other retirement assets, deferred compensation, and stock options all need to be carefully handled.

Tax issues are of course apparent – there is only one right way to divide each type of retirement asset and if you do it wrong the tax consequences to the person initially owning the pension can be severe. 

There are many precise aspects to handling stock options and deferred compensation as well. Agreements should be carefully done, as inadvertent results like in the Wooters case, can occur.  In that case the agreement did not specify how future stock options would be treated, because the husband was not in a job that had options at the time of divorce.  The definition of ‘”earned income” in the agreement, tracked the tax code which treats options as income when they are exercised.  As a result, when he changed employment and received options they were treated as part of his income for support.  

Deferred compensation comes in varied forms.  Your attorney will need to be very familiar with the individual business plans that cover the particular compensation in question.

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