Property Division: “Equitable” Does Not Always Mean “Equal”

Posted On April 20th, 2016 by Michael Dunham

[Ed: Originally published on Facebook.]

Yesterday we looked at a fact pattern that shows how a court can make “equitable” awards of property that are not necessarily “equal”. Yesterday’s example was based on each party’s current ability to pay. Today we will look at a common fact pattern which involves different time horizons.

Let’s say the husband has worked as a C-level executive for 20 years for a big company, long enough to qualify for a pension, which figures to pay him handsomely at retirement – but let’s also assume he is at least 15 years away from retirement. The husband has also received stock and stock options on an annual basis as part of his compensation, which have fully vested and which the parties have kept in a brokerage account. The wife has not worked in more than a decade, and her job prospects are poor due to a lack of experience and formal education. In addition, the parties have a special needs child who requires substantially more attention from a caregiver, who has most often been the wife. In a case like that, it may make sense for the court to award a substantial portion of (or all of) the stock account – which, if carefully managed, can provide immediate and sustained cash flow – to the wife, so that she will have an asset she can use to help support herself (and the child). Division of the pension is less important to the wife in the near term, and probably more important to the husband in the long term, because the husband’s ability to rebuild the stock account is greater, and the benefit to the husband from growing the pension will be much more important to him later than it is now.

No matter how your property is divided, you will want to spend some time planning for how you’re going to manage it all on your own. This is where the “Your Post-Divorce Compass” plan can really help you.