John A. Patti, Esq.FindLaw IM Template2026-05-04T15:15:20Zhttps://www.japlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1203321/2019/09/cropped-ID-32x32.jpgOn Behalf of John A. Patti, Esq.<![CDATA[Dividing unvested RSUs and stock options in a New Jersey divorce]]>https://www.japlaw.com/?p=528932026-04-30T10:25:04Z2026-04-30T10:25:04ZRestricted stock units (RSUs) may vest over time based on job performance or tenure at the company. Professionals may also eventually become eligible for stock options after they meet certain contractual criteria. Those in the tech sector are among the professionals most likely to have stock options and RSUs integrated into their compensation packages.
These valuable future windfalls are potentially vulnerable in a divorce. Understanding how New Jersey applies equitable distribution rules to deferred compensation can help well-compensation professionals understand how to protect their finances during a divorce.
What is the New Jersey approach to RSUs and stock options?
There are two key prior court rulings that influence how the courts address unvested RSUs and stock options during divorce proceedings. Property owned by either spouse, including marital income, is typically subject to equitable distribution rules.
The Callahan V. Callahan decision from 1976 confirms that even non-vested stock options are marital assets subject to equitable distribution during a divorce, even though the stock option may not yet be available to the employee spouse. They are a form of earned compensation, so the portion earned during the marriage is divisible.
The courts may create a so-called Callahan Trust. This is a constructive trust to address resources earned during the marriage but held in the name of only one spouse to ensure the appropriate distribution of those assets at the time that the employee spouse acquires them.
The M.G. v. S.M. Appellate Division ruling from 2018 established a rebuttable presumption that stock options acquired during marriage are marital property. The spouse entitled to those stock options can present evidence to challenge that presumption.
The key factor separating what portion of the RSUs or stock options are separate versus marital is how much of the deferred compensation relates to prior job performance as opposed to future performance from the employee spouse. The process of valuing RSUs and stock options may require a valuation performed by an expert professional, as market volatility makes predicting the future value of stock all but impossible.
Tech professionals and other well-compensated workers concerned about protecting their unvested RSUs and stock options need help evaluating what portion of their resources may be vulnerable, the value of their deferred compensation and the tax considerations of acquiring RSUs or stock options. Working with attorneys who have experience handling complex assets, deferred compensation and other high-asset divorce challenges can help to ensure a fair outcome during property division proceedings.]]>On Behalf of John A. Patti, Esq.<![CDATA[Hidden compensation and “perks” in high-income marriages]]>https://www.japlaw.com/?p=528902026-03-11T14:11:15Z2026-03-11T14:11:15ZReviewing employer-paid benefits as financial resources
New Jersey courts review each spouse's financial resources. Your job benefits can appear in that review when they replace personal spending.
For example, your company credit card can cover meals or travel. A corporate account can pay for work trips. When your employer covers these costs, the benefit reduces your personal expenses. That effect can influence the income review tied to support.
Assessing travel, housing and expense perks in support
Your job might include perks that lower major living costs. Courts sometimes examine these benefits during support analysis. Common examples include:
Company-paid travel that covers flights, hotels or meals
Employer-funded housing or relocation housing
Corporate expense accounts used for transportation or client meetings
Each perk lowers your personal spending. Because of that effect, courts sometimes review these benefits when they examine financial resources tied to support.
What these employment perks can mean for support
Your compensation can include more than salary. Travel perks, housing benefits and company-paid expenses can shape the financial picture during a divorce case. When courts review financial resources in New Jersey, these benefits can influence support discussions.]]>On Behalf of John A. Patti, Esq.<![CDATA[The ‘secret’ bank account: Legal consequences for hiding assets in a New Jersey divorce]]>https://www.japlaw.com/?p=528712025-09-10T18:34:09Z2025-09-10T18:34:09ZYour assets are not secret
During a New Jersey divorce, a crucial phase called "discovery" takes place. In this formal legal process, both spouses must reveal all their financial information, including bank records, tax returns, property deeds and much more.
Skilled attorneys and forensic accountants are adept at spotting inconsistencies. They use subpoenas, depositions, and detailed financial analysis to find any discrepancies and track down hidden money. One thing you can usually count on is that a "secret" bank account will eventually come to light.
Potential penalties: Forfeiting hidden assets
New Jersey’s principle of equitable distribution guides the fair division of marital assets. Fair does not always mean equal. If you fail to disclose assets, a court can punish you. Instead of a 50/50 split, the court can award the entire hidden asset to your spouse.
For example, if you hide a $50,000 investment account, you could lose it all. Your spouse would then receive the full amount as a penalty for your dishonesty.
Beyond the asset: Contempt and financial repercussions
The consequences of hiding assets go far beyond losing the asset itself. This act violates a court order and shows blatant dishonesty, which can lead to contempt of court charges. A judge can impose:
Fines
Legal sanctions
Even jail time in severe cases
You will also likely pay your spouse's attorney fees and legal costs related to uncovering your hidden assets.
High risk, low reward
Trying to hide assets in a New Jersey divorce is like trying to build a house on quicksand. The legal and financial repercussions are severe. Complete honesty and transparency, guided by experienced legal counsel, offer the best path forward.
Likewise, if you suspect your spouse is hiding assets but lack proof, you should share your concerns with your lawyer. They can use the legal discovery process to investigate your suspicions and uncover the truth.]]>On Behalf of John A. Patti, Esq.<![CDATA[Luxury assets and divorce: Managing high-value properties]]>https://www.japlaw.com/?p=528702025-06-23T06:48:54Z2025-06-23T06:48:54ZDividing property in a divorce is rarely simple. And when that property includes luxury homes, valuable art or fine jewelry, it becomes a financial puzzle with lasting consequences. If you're divorcing in Monmouth County and own high-value assets, you need to understand how New Jersey courts handle division and how to protect what's rightfully yours.
How New Jersey divides property during divorce
New Jersey applies equitable distribution, which doesn't require splitting everything down the middle — instead, the court decides what's fair. That decision depends on when you acquired the asset, how you maintained it and whether it served a personal or marital purpose. The higher the value, the more likely you will need appraisals, financial disclosures and expert analysis to support your position.
Real estate, art and jewelry are not treated the same
High-value assets demand individualized consideration, as they often hold financial, emotional or strategic weight. A vacation home might also function as an income-producing rental or carry tax implications. An art collection may rise or fall in value and often requires specialized appraisal. Jewelry often creates conflict when one spouse claims it as a gift or inheritance while the other views it as shared. Each category presents unique legal and financial challenges — and courts weigh them accordingly.
The right paperwork can protect what's yours
If you want to keep certain assets out of the marital pot, you need to show clear records — not just rely on memory. That includes deeds, invoices, appraisals and proof that you inherited or acquired the item before marriage. Without documentation, you risk letting the court treat that asset as shared, even if you know it shouldn't be.
Why high-asset divorces need early legal strategy
You can't afford to wait when your property portfolio is at risk. By speaking with a divorce attorney early, you can start shaping a plan — whether you need to value complex assets, respond to disclosure requests or prepare for negotiations before litigation becomes necessary.
When the stakes are high, so is the need to plan early
If your property includes luxury real estate, collections or other significant assets, start now. Laying the groundwork early gives you the best chance to control the outcome and protect what you've worked hard to build. And when you're facing a high-asset divorce, having an attorney who understands how these cases unfold can make all the difference.]]>On Behalf of John A. Patti, Esq.<![CDATA[Tax implications of a high-asset divorce]]>https://www.japlaw.com/?p=528692025-04-29T22:22:59Z2025-04-29T22:22:59ZAlimony and child support
In a divorce, alimony and child support are key financial components. Since 2019, if you pay alimony, you cannot deduct it from your taxes, and the person receiving it does not have to report it as income. This contrasts with prior regulations, where alimony could be deducted by the payer and had to be reported as income by the recipient. On the other hand, child support has always been non-taxable and non-deductible, meaning it does not affect taxes for either parent.
After a divorce, it is essential to adjust your tax withholding so you do not pay too much or too little in taxes. Use the IRS Tax Withholding Estimator to find the right amount to withhold from your paycheck. If you get alimony, consider adjusting your withholding or making estimated tax payments.
Property transfers
Dividing property in a divorce can affect your taxes. Usually, if you transfer property to your ex-spouse, it is not taxed. Still, you should document these transfers properly to avoid future issues. In some cases, you may need to file a gift tax return if the transfer meets certain conditions.
Retirement accounts
Retirement accounts are often significant assets in a divorce. You can transfer IRAs without taxes if done correctly. If you receive money from a retirement account due to divorce, it might not be subject to penalties, but it could be taxable if not rolled over into another retirement account.
Claiming dependents
Deciding who claims dependents can affect your tax benefits. Usually, the parent with custody claims the child, which can let them file as head of household and get certain credits. If custody is split equally, parents must decide who claims the child, as only one can do so each year. In these cases, clear communication can prevent conflicts.
Filing status changes
Your tax filing status changes with divorce. If you are officially divorced by the end of the year, you must file as single or head of household if you qualify. This change affects your tax bracket and the credits you can get. If you are separated but not divorced, you might still have to file as married, either together or separately.
Divorce affects both emotions and finances. Understanding taxes in a divorce helps you protect your assets and plan for a stable future. Additionally, working with a family law attorney can help make decisions that align with your goals. Remember that taking steps now can lead to a secure future after the divorce.
]]>On Behalf of John A. Patti, Esq.<![CDATA[Divorce: Did you invest in a family business instead of taking a salary?]]>https://www.japlaw.com/?p=528252026-04-22T05:34:25Z2024-08-26T13:13:06ZReinvesting is a form of commingling
New Jersey has an equitable distribution approach to property division when people divorce. Simply put, the courts want to arrive at a fair solution for dividing marital property between the two spouses. What is fair depends in part on the assets, earning potential and separate property of the spouses.
When one spouse reinvested marital income in the business by forgoing a salary, that could theoretically lead to the business's vulnerability in a divorce scenario even if it might otherwise be their separate property.
The use of marital income to invest in a company makes the business at least partially marital property. That is true regardless of whether the spouse making the concession is the one running the business or the one providing basic support services like answering phones or responding to client emails.
Deferred salaries can affect company finances
When discussing how to value the business and divide any marital portion of its equity in a divorce, spouses may need to consider outstanding business debts. A salary temporarily deferred to reinvest in the business might theoretically influence the value of the business in the event of a divorce.
The nature of the employment arrangements, the duration of the unpaid work and a variety of other factors may influence how much of an impact deferring salary payments might have on the business's finances in a New Jersey divorce. Someone who reinvested in the company might be able to hold the business accountable for their unpaid wages or at least factor in the value of that unreceived income when deciding what to do with the business and other marital assets.
Deferred salaries are one of many complicating factors that can arise when navigating a divorce as a small business owner. Understanding state law and a company's finances can put people in the best possible position as they prepare for a complex divorce.]]>On Behalf of John A. Patti, Esq.<![CDATA[Protecting a 401(k) during divorce proceedings]]>https://www.japlaw.com/?p=528232026-04-22T05:20:11Z2024-06-25T22:04:01ZBy making other concessions
To retain a particular high-value asset, someone has to give up other resources of comparable value in most cases. If both spouses have 401(k)s, they could potentially both keep their separate accounts. Other times, only one spouse has a 401(k). They may have to give up their claim to other property or agree to take on more marital debt in return for retaining the 401(k) in its entirety. People can often prevent the division of a 401(k) with careful planning and negotiations.
By using the right tools to split the account
Sometimes, actually dividing the 401(k) is the simplest and most effective solution. People worry about splitting retirement savings accounts in part because they could be at risk of penalties and taxes. Using a qualified domestic relations order (QDRO) to divide a 401(k) can help people avoid the 10% penalty that they might otherwise need to pay. By keeping the funds in two separate 401(k) accounts, spouses can prevent any tax consequences that might come from an actual withdrawal.
The best solution for any particular situation depends on the nature of the marital estate, the age of the spouses and other unique factors. Developing strategic goals while preparing for property division in a complex divorce case can benefit both spouses, as people who focus on specific resources may feel more satisfied with the outcome of a divorce process than those whose expectations aren’t realistic.]]>On Behalf of John A. Patti, Esq.<![CDATA[Risk-taking attitudes and divorce]]>https://www.japlaw.com/?p=528222026-04-22T05:20:50Z2024-04-29T21:59:55Zrecent research from UC San Diego, highlight how differences in risk tolerance can create tension and ultimately lead to divorce.
Exploring the connection between risk-taking attitudes and marital stability can help couples understand why financial decisions can become a battleground and what steps they can take to navigate financial matters as a team.
The tightrope walk of financial decisions
Financial decisions are a constant tightrope walk for couples. Should they prioritize saving for a down payment on a house or invest aggressively in the stock market? How much is a comfortable amount of fun money to spend each month? These seemingly simple questions can expose underlying differences in how comfortable each partner is with risk.
One partner, for example, might be a saver, content with a secure but low-yield investment strategy. The other might be a thrill-seeker, drawn to the higher potential returns (and potential losses) of the stock market. These conflicting preferences can lead to arguments, resentment and a feeling of a lack of shared goals.
The UC San Diego research reinforces this notion. Their study found that couples who disagreed on savings and investment decisions were twice as likely to experience divorce. This highlights the importance of open communication and a willingness to compromise when it comes to financial matters.
Risk tolerance: Understanding the comfort zone
Risk tolerance refers to an individual’s comfort level with financial uncertainty. Here’s a breakdown of the different types:
Risk-averse: These individuals prioritize security and stability. They might favor low-risk investments like savings accounts or bonds, even if the returns are lower.
Risk-neutral: These individuals are comfortable with a moderate level of risk and reward. They might invest in a mix of assets, balancing security with growth potential.
Risk-seeking: These individuals are drawn to the excitement and potential for high returns, even if it means facing the possibility of significant losses. They might invest heavily in stocks or other volatile assets.
Understanding one’s own risk tolerance and their partner’s is crucial. Open and honest conversations about financial goals, fears and past experiences with money can help bridge the gap and foster empathy.
Without acknowledging differences and working towards solutions, financial decisions can become a source of conflict in a relationship. When a difference in risk-taking attitudes leads to divorce, couples can benefit from personalized legal guidance to smooth out their separation.]]>On Behalf of John A. Patti, Esq.<![CDATA[Do business owners divorce more often?]]>https://www.japlaw.com/?p=528202024-02-29T19:47:10Z2024-02-29T19:47:10ZEntrepreneurs have relatively high divorce rates
Overall, domestic rates of both marriage and divorce have declined in recent decades. However, some groups continue to report relatively high rates of divorce. Some researchers estimate that between 43 and 48% of those who start their own businesses may end up divorced after doing so.
There are many reasons why entrepreneurs and small business owners have a higher overall risk of divorce than members of the general public. The time and money invested in their business is one consideration. Jealousy or a sense of abandonment on the part of their spouse is another. Business owners may file for divorce when they feel unsupported, or their spouses may file out of frustration.
If an entrepreneur does divorce, they have more to worry about than the average person ending a marriage. The business could be vulnerable during divorce. If someone invests marital income in the creation or improvement of a small business, then the company they form could be partially marital property.
They may need to report their company's current value to the courts and factor that into the property division process. The value of a business and the support another spouse provides an entrepreneur can both potentially impact how the courts decide to handle property division and financial support matters in a divorce.
Establishing a reasonable business valuation and a workable divorce strategy can help entrepreneurs minimize any setbacks they experience because of a divorce.]]>On Behalf of John A. Patti, Esq.<![CDATA[Piercing the corporate veil during divorce]]>https://www.japlaw.com/?p=528192026-04-22T05:21:00Z2024-01-03T01:14:06ZMost young children are taught that “sharing is caring.” Unfortunately, some adults hold onto the inverse lesson, that failing to share is a concrete way of showing someone that you don’t care about them. This mindset can be destructive at the best of times. Yet, when tensions are high and much is at stake, the consequences of this kind of approach can be downright unlawful.
Take, for example, a high-asset divorce scenario in which one spouse is deeply invested in a corporation or limited liability company (LLC) and their spouse is not. If the business-focused spouse is disinclined to share their income, bonuses, benefits or other assets with their spouse whom they’re divorcing, they might be tempted to hide these resources within their company or their employer’s enterprise in some way.
What can a wronged spouse do?
The good news for a spouse whose other half refuses to lawfully disclose and share their assets is that recourse is available. If assets that have been hidden within a company’s books and accounts are discovered, the wronged spouse can “pierce the corporate veil” to get their fair share back. Piercing the corporate veil is a process wherein business assets may be seized to satisfy debts and other legal obligations. This approach is usually appropriate when the spouse-in-the-wrong is so closely tied to their business or business accounts that they aren’t easily separated and it would be unjust to treat the wrongdoing as the company’s fault. Instead, the individual is held accountable for the assets they’ve hidden within a business context.
Seeking justice
When a court is advised that a spouse has been unlawfully hiding assets, the court may not only move to restore the wronged spouse’s interest in those assets, it may punish the deceptive spouse as well. Depending on the couple’s circumstances, a wronged spouse may be awarded lump-sum or ongoing support as a result of the hidden assets or they may simply be awarded their fair share of what was hidden in the first place as part of the broader property division order. They may be awarded more than what would have been considered their fair share as the other spouse’s punishment for wrongdoing.The concept of piercing the corporate veil is a complicated one. Any spouse who believes that their ex may be hiding assets within a business entity can benefit from seeking personalized legal guidance.]]>