6 ms·

Sorry, I was sort of vague here. Basically, I had to give $105,000 (half) of the 401K to my ex-wife, I had to pay her out for potential values of my stock optio

by dsnuh 8y ago

Sorry, I was sort of vague here. Basically, I had to give $105,000 (half) of the 401K to my ex-wife, I had to pay her out for potential values of my stock options and RSU's (have fun valuing those!), I had Smith-Ostler riders attached to any bonus income, I had three more years of spousal support ($1800 per month), legal fees to pay, etc. I used the 401K to pay these things, so technically, I did get half, I just had to immediately use it to pay it all to my ex-wife. Yes, I kept the house, which was my separate property with a community property interest, since it was purchased in my name only before we were married. I cannot afford the house, so I am trying to play the foreclosure avoidance game and give my kids a nice place to live that provides them with some continuity. I also had $1700 in child support (this is two kids, with a 60/40 custody share) that I offered to give her more money in the settlement if she would agree to $1400 instead. She agreed to that, and then before that judgment had even been processed, had me back in court to get $1700 per month, which she did, since the court will use whatever Disso-Master spits out. She owns her own business, and of course her personal and business accounts are mingled, so there is no way to pinpoint what she actually makes, but it was at least $3,500 per month part time when we were married. But none of that matters if you earned a lot more than your spouse. Divorce is no joke, especially if you are the high earner in the relationship. A lot of people are under the assumption that if you split custody, you don't pay support or the support is a nominal amount. This is absolutely not the case. The court (in CA, at least) looks to maintain the children's standard of living DURING THE MARRIAGE until the child is 18 or emancipated. This is the case even if your divorce left you in very different circumstances. That's just child support, which is only one of the many costs associated with divorce. (I want to make it clear that I have no problem with paying _reasonable_ child support, but I'm sorry, the current child support calculations can leave you with an egregious amount of support payments)

coldtea 8y ago
>The court (in CA, at least) looks to maintain the children's standard of living DURING THE MARRIAGE until the child is 18 or emancipated. Why? Standard of livings can be preposterous and dependent on previous economic status (which might not be the same post divorce -- and in many cases it isn't). The court doesn't care for the millions of kids who fall on standard of living without a divorce (or even while having been had out of wedlock), or who start and end on a low standard of living to begin with. Why should it care for the "same standard of living" in the case of divorce? A decent standard of living (housing, food, etc) yes. But "maintain" the pre-divorce standard of living is BS.
- dsnuh 8y ago
  Take a look at the site that was posted in some of the comments[0]. A choice quote: "Should the guy have to pay that much as a result of a casual encounter? Wagner says emphatically yes: "The child had nothing to say about being born or the wisdom of a one-night stand. That child should be supported exactly as if those parties had married and stayed married forever." Is he worried about an incentive structure where a one-night stand is more lucrative than going to college and working? "A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says. "Put yourself in the diaper of the child. Public policy says that he or she has a human right to be raised in the lifestyle of the two parents. If you don't like that philosophy get the hell out of California." Wagner explains that the current law came about because "California was ranked 45th in nation in late 1980s in the amount of child support obtainable. The legislature was astounded and created the current system. It is public policy that California will always be ranked among the top 5 states [in potential profits from child support]." [0]http://www.realworlddivorce.com http://www.realworlddivorce.com
  - coldtea 8y ago
    >"A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says. They might "slap you silly", but they would still be wrong. And not everybody "attends college" or works cushy enough jobs...
mjevans 8y ago
That last part seems highly illogical given the elimination of many of the cost of living reducing factors of having a functional single household with multiple individuals living there.
- dsnuh 8y ago
  If you are expecting logic to rule in this domain, you're in for some disappointment. Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket.
  - NTDF9 8y ago
    > Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket. This is just incredible. What a naive legal system!
closeparen 8y ago
Divorce entitles you to immediate liquidity on illiquid assets? That’s crazy. I’d understand 50% on vesting. Unicorn employees tend to have more than twice as much illiquid stock as they have cash.
- dsnuh 8y ago
  How it works (unless you settle for some amount, which I did, which ended up biting me in the ass when our stock took a 30% haircut, but I digress...) is that there is a community property interest in all assets earned during the marriage, regardless of future vesting schedule. It's all based on when the options were granted, when they vest, how long you worked there, etc. If you have RSUs, you get to go through the fun process of either giving some value to these RSUs and paying off the other party's community interest in that valuation, or you can try to argue that RSUs have a zero dollars value until granted. Good luck with RSUs and stock options either way, as it can become a complicated mess of laws and formulas.
- dsnuh 8y ago
  You can set it up different ways, but you will definitely have to get a QDRO for splitting up any retirement accounts into two new accounts. You can try to do the same thing with stocks, where you pay when you vest or sell, or sell on behalf of the other party, but in my case, and I suspect many others, I wanted the cleanest break possible and I settled on a payout amount simply to reduce the amount of communication with my ex-wife that would be necessary to pull this off.

by dsnuh 8y ago

coldtea 8y ago

>The court (in CA, at least) looks to maintain the children's standard of living DURING THE MARRIAGE until the child is 18 or emancipated. Why? Standard of livings can be preposterous and dependent on previous economic status (which might not be the same post divorce -- and in many cases it isn't). The court doesn't care for the millions of kids who fall on standard of living without a divorce (or even while having been had out of wedlock), or who start and end on a low standard of living to begin with. Why should it care for the "same standard of living" in the case of divorce? A decent standard of living (housing, food, etc) yes. But "maintain" the pre-divorce standard of living is BS.

dsnuh 8y ago
Take a look at the site that was posted in some of the comments[0]. A choice quote: "Should the guy have to pay that much as a result of a casual encounter? Wagner says emphatically yes: "The child had nothing to say about being born or the wisdom of a one-night stand. That child should be supported exactly as if those parties had married and stayed married forever." Is he worried about an incentive structure where a one-night stand is more lucrative than going to college and working? "A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says. "Put yourself in the diaper of the child. Public policy says that he or she has a human right to be raised in the lifestyle of the two parents. If you don't like that philosophy get the hell out of California." Wagner explains that the current law came about because "California was ranked 45th in nation in late 1980s in the amount of child support obtainable. The legislature was astounded and created the current system. It is public policy that California will always be ranked among the top 5 states [in potential profits from child support]." [0]http://www.realworlddivorce.com http://www.realworlddivorce.com
- coldtea 8y ago
  >"A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says. They might "slap you silly", but they would still be wrong. And not everybody "attends college" or works cushy enough jobs...

mjevans 8y ago

That last part seems highly illogical given the elimination of many of the cost of living reducing factors of having a functional single household with multiple individuals living there.

dsnuh 8y ago
If you are expecting logic to rule in this domain, you're in for some disappointment. Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket.
- NTDF9 8y ago
  > Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket. This is just incredible. What a naive legal system!

closeparen 8y ago

Divorce entitles you to immediate liquidity on illiquid assets? That’s crazy. I’d understand 50% on vesting. Unicorn employees tend to have more than twice as much illiquid stock as they have cash.

dsnuh 8y ago
How it works (unless you settle for some amount, which I did, which ended up biting me in the ass when our stock took a 30% haircut, but I digress...) is that there is a community property interest in all assets earned during the marriage, regardless of future vesting schedule. It's all based on when the options were granted, when they vest, how long you worked there, etc. If you have RSUs, you get to go through the fun process of either giving some value to these RSUs and paying off the other party's community interest in that valuation, or you can try to argue that RSUs have a zero dollars value until granted. Good luck with RSUs and stock options either way, as it can become a complicated mess of laws and formulas.
dsnuh 8y ago
You can set it up different ways, but you will definitely have to get a QDRO for splitting up any retirement accounts into two new accounts. You can try to do the same thing with stocks, where you pay when you vest or sell, or sell on behalf of the other party, but in my case, and I suspect many others, I wanted the cleanest break possible and I settled on a payout amount simply to reduce the amount of communication with my ex-wife that would be necessary to pull this off.