Orange County Divorce Lawyers for Company Executives and Their Spouses

Divorces involving company executives present some unique considerations and potential challenges. Not only do executives and their spouses often have substantial assets that they want to protect, but an executive’s divorce can have implications for his or her company as well. With this in mind, the divorce process typically involves additional planning and preparation, and executives and their spouses must both work with experienced counsel to make informed decisions both before and during the process.

Our Irvine and Orange County high-net-worth divorce lawyers have significant experience representing company executives and their spouses in complex and high-profile divorces. If you are a CEO, CFO, or other C-suite executive, or if you are married to a corporate executive at a private or publicly-traded company, we can help you strategically and effectively navigate your divorce. We can assist with protecting your assets and income, preserving your relationship with your children, and planning for any potential impacts for your company, if necessary.

Assets and Income in High-Net-Worth Divorces Involving Company Executives

Many of the unique aspects of divorces involving company executives have to do with the couple’s assets and income. While California’s general property division and alimony laws apply, there are special considerations involved with executive compensation packages, vested and unvested stock options, bonuses, and other assets of significant value. At Seastrom Tuttle Murphy Dockstader, our Irvine divorce lawyers help our clients successfully address matters including:

• Prenuptial Agreements – If you and your spouse have a prenuptial agreement, the first issue that needs to be addressed is whether (and to what extent) the agreement is enforceable under California law. If you have an enforceable prenuptial agreement, the terms of the agreement could control many of the most significant financial and property-related aspects of your divorce.
• Executive Compensation – In California, the obligation to pay alimony is determined by applying a variety of statutory factors. Since executive compensation packages often involve more than just an annual salary, determining how much alimony (if any) is owed typically requires a thorough assessment of the particular circumstances involved in a couple’s divorce.
• Stocks, Options and Bonuses – With regard to stocks, options and bonuses received as executive compensation, spouses’ respective rights during the divorce process depend on factors including whether the compensation was earned during the marriage, regardless of when received, whether the executive’s rights have vested, and the class of shares at issue.
• Retirement Accounts and Pensions – There are special rules regarding the distribution of retirement accounts and pensions during a divorce in Orange County. Whether you earned your retirement savings or you need to seek a share of your spouse’s retirement savings in your divorce, we can help you fully enforce your rights under California law.
• Company Ownership and Control – In some cases, an executive’s divorce can also have implications for a private company’s ownership and control. If your divorce has the potential to result in joint ownership and/or joint control of a privately-held company, this is an issue that you will need to consider and address thoroughly during your divorce.  
• Insurance Policies and Investments – Life insurance and health insurance are also at issue in many executive divorces in Orange County. For couples that have accumulated substantial investment portfolios, determining how to divide these assets appropriately will require careful and strategic consideration as well.
• Real Estate and Personal Property – California’s community property law requires spouses to divide all of their marital assets during the divorce process (in the absence of an enforceable prenuptial agreement). If you and your spouse own multiple homes, vehicles, boats, collectibles, or other high-value items of real or personal property, it will be important to obtain appropriate valuations and take all of the other necessary steps to ensure you receive your fair share in your divorce.

When dealing with property division and alimony in a high-net-worth divorce, it is important not to overlook the potential tax implications involved. When our Irvine divorce lawyers represent company executives and their spouses during their divorces, we help our clients focus on strategies that not only protect their rights under California law but that minimize their state and federal tax liability as well.

Handling Child Custody Matters When You and/or Your Spouse Work Full Time

If you have children from your marriage, child custody will play a central role in your divorce. California law requires that all custody decisions be made in the best interests of the children involved. However, there are several options available for structuring parenting time post-divorce, and working full time is not necessarily an impediment to securing the custody rights you desire.

When we represent divorcing parents, we work closely with our clients to understand their personal preferences and their children’s needs. We also seek to understand their spouses’ wants and needs—as this will often have a significant impact on the strategy we recommend. Ultimately, we provide advice and representation focused on satisfying California’s “best interests” standard while securing our clients’ desired parenting rights without unnecessary antagonism or litigation.  

Dealing with Confidentiality, Public Perception and Other Matters

Understandably, many company executives prefer to keep their divorces out of the public eye. Not only does this help to protect their personal reputation, but it also helps to prevent any adverse consequences for their companies. Since going to court can potentially mean having your divorce made public, this is a concern worth considering, and it is one that we take into account during our representation.

If you have any privacy or confidentiality concerns related to your divorce, our Orange County attorneys will address these from the outset. We can work with your spouse’s legal counsel to establish parameters and establish an agreement to keep your divorce private. If going to court becomes necessary, we can seek to have all documents filed “under seal,” and we can continue to work toward negotiating a confidential settlement before your divorce goes to verdict.

Speak With One of Our Irvine High-Net-Worth Divorce Lawyers in Confidence

If you need to speak with a lawyer about preparing for an executive divorce in Orange County, we encourage you to get in touch. To schedule a confidential appointment with one of our Irvine high-net-worth divorce lawyers, please call 949-474-0800 or contact us online today. 

About the Firm

Seastrom Tuttle Murphy Dockstader is a family law firm in Irvine representing clients throughout Orange County, and in Los Angeles County. The firm practices family law exclusively.

Its attorneys include Fellows of the American Academy of Matrimonial Lawyers and of the International Academy of Family Lawyers, and attorneys certified as specialists in family law by the State Bar of California Board of Legal Specialization. Members of the firm have served on the State Bar commission that authors the certification examination those specialists must pass, and have been recognized by Best Lawyers in America and Super Lawyers.

An executive’s compensation is rarely just salary, and the parts that are not salary drive the division. Restricted stock units that vest on a schedule straddling the date of separation. Options granted for past performance and options granted to retain someone going forward. Deferred compensation that will be taxed at a rate nobody can predict. Severance and change-of-control provisions that convert to cash only on an event that may never happen.

California apportions an equity award according to what the award was compensating and when. An award granted to reward work already performed during the marriage is treated differently from an award granted to keep the executive in the seat for years after separation, and a single grant can contain both. Getting the apportionment right requires the grant agreement and the plan document, not just the vesting statement. The same analysis then has to survive a support calculation, because the income the award produces on vesting and the asset the award represents are not the same thing and cannot be counted twice.

The firm handles these matters for public company officers, technology and biotech executives, physicians in group practice, hospital and health system administrators, and senior managers at privately held companies preparing for a sale.

Call 949.474.0800 to discuss the matter with the firm.

Common Questions

For a fuller treatment of how California courts characterize and divide restricted stock, options, and deferred compensation, see Executive Compensation in Divorce.

Who at the firm handles complex financial divorce matters?

The firm practices family law exclusively and has represented Orange County families since 1976. Its Certified Family Law Specialists, certified in family law by the State Bar of California’s Board of Legal Specialization, are Brian G. Seastrom, Philip G. Seastrom, Thomas W. Tuttle, Janet E. Dockstader, and Ryan Patrick Murphy. Certification requires demonstrated experience in family law, peer review, and a written examination. The firm handles restricted stock units, incentive and non-qualified stock options, performance shares, deferred compensation and SERPs, golden parachutes, Hug and Nelson time-rule apportionment of unvested equity, and phantom income and tax-timing questions.

How are unvested RSUs divided in a California divorce?

Unvested restricted stock units are apportioned between community and separate property according to what the grant was compensating and the portion of that period that fell within the marriage. An award that rewards past performance is treated differently from an award granted to retain the executive after separation, and one grant can contain elements of both. The grant agreement and the governing plan document control the analysis, so both are needed before any allocation can be calculated.

Can the same stock award be counted as both income and property?

No. An equity award is either a divisible asset or a stream of income for support purposes, and courts do not permit the same dollars to be counted twice. Where the line falls depends on how the award was characterized in the property division. This is one of the more heavily litigated issues in executive divorce cases, and it is worth resolving deliberately rather than leaving it to be sorted out later.

What happens to deferred compensation and a SERP in divorce?

Deferred compensation and supplemental executive retirement plan benefits are community property to the extent they were earned during the marriage, but they usually cannot be divided by transferring an account. The typical solutions are an offset against other assets, or a reserved-jurisdiction order under which the non-employee spouse receives a share as payments are made, with the tax burden allocated in the order itself.

Does my employer find out about the divorce?

Not automatically, and keeping the matter contained is usually one of the objectives. A plan administrator may need to be served with an order to divide a retirement interest, and a subpoena to the employer is sometimes necessary if records are withheld. Both are avoidable in many cases when the executive produces the grant documents and plan statements voluntarily.