Pennsylvania High-End Divorces – Mistakes to Avoid (Part 2)

In Pennsylvania high-end divorces, it is important for parties to protect their interests.  In part 1 of this Pennsylvania high-end divorce article, we discussed one of the mistakes parties make which can adversely affect the outcome of the divorce, i.e., hiding information from their divorce lawyer.  In part 2 of this article series, we will discuss another mistake parties may make in Pennsylvania high-end divorces.

Making Emotional Decisions

When people are going through a divorce, it can take a toll on them physically and emotionally. In Pennsylvania divorce cases, parties may find that the emotional strain is quite significant.  For some, the divorce is so painful that they just want it over.  This often leads them to make quick and rash decisions, like the husband in this following example.

A couple is getting divorced after 10 years of marriage.  They have no children.  Both the husband and wife have high incomes, but the wife’s annual income is significantly higher than the husband’s income.  The wife is unhappy in the marriage and wants a divorce.  The husband is so distraught by the divorce proceedings that he feels as though it could not end soon enough so he can move on with his life.  Although the wife makes much more than the husband, she does not want to split their assets equitably.  She makes various, unreasonable demands.  One of her demands is that she keeps all of her deferred compensation, regardless of when it was earned.  Typically, any deferred compensation granted during the marriage is marital regardless of when it is vested and it is subject to equitable distribution.  Any deferred compensation granted after separation would be considered income to wife subject to alimony upon vesting.  Deferred compensation such as stock options (ISO’s, or NQSO’s) or restricted stock units (RSU’s) can have significant value, especially when the employer granting the compensation is doing well or will be doing well in the future before the options or units expire.  Although husband believes he might be entitled to the deferred compensation, he thinks it is not worth much and as such he waives any and all rights to the deferred compensation in the marital settlement agreement, just to get the divorce over with.  Due to wife’s employer’s performance in the next year, the deferred compensation husband waived his right to equitably divide, winds up being worth more than the entire marital estate. 

This example demonstrates how important it is for parties in high-asset divorce cases to talk to their Pennsylvania divorce lawyer and listen to their advice.  It is important to make rational, reasonable decisions and not let emotions cloud their judgment.

Continue to part 3 of this article series which discusses other mistakes parties may make in Pennsylvania high-end divorces.