Dividing marital assets is one of the most important processes during divorce. Property division is not always as straightforward as it may appear though. For example, you do not have to divide assets equally in Alabama. Instead, you should focus on securing a division of assets that is equitable.
Equitable in this sense means that the division of assets should be fair. Where things can get a little complicated is discerning between separate and marital property. However, when sorting through and deciding which property is separate and which is jointly owned, you might accidentally overlook some valuable assets.
What are restricted stock units?
In certain careers, income involves more than what is listed on the paycheck. Restricted stock units are commonly included as part of one’s income stream in industries like banking or finance, and even many executive level corporate jobs offer these as part of their compensation packages. While restricted stock units can be confusing, all you need to understand is that they are future income tied to certain terms, such as length of employment.
If your spouse’s compensation package includes restricted stock units, you must account for what would have been earned over the course of your marriage that you might be owed. However, restricted stock units are generally not transferable. This means that it may be appropriate to keep a larger portion of marital assets to account for them.
What about military pensions?
There is a lot of confusion when it comes to keeping military benefits as a non-military ex-spouse. If you were counting on military retirement or health insurance benefits in the future — especially if you are already close to retirement — you might be worried about having to readjust your financial plans. One thing you want to keep in mind is what is known as the 20-20-20 rule:
- Your spouse served for a period of at least 20 years.
- You were married for a period of at least 20 years.
- Your marriage and your ex’s service overlapped for a period of at least 20 years.
If you meet these requirements, you should still be able to receive these benefits after divorce. However, simply qualifying to keep these benefits is not enough. You should be sure to fill out all relevant paperwork and avoid doing anything that might indicate you are waiving your rights.
Do not forget about civilian pensions
Many civilian jobs also provide pensions, which are separate from your retirement savings like 401(k)s or IRAs. If you are not the pension holder, be sure to properly account for this future income. You have a right to access a portion of these funds since they were saved during your marriage with the intent of supporting both of you.
Divorce does not have to ruin your finances. Indeed, many people find that taking a proactive approach to things like property division can not only preserve their financial status after divorce but may even put them in a more favorable position. It is important to understand how property division works in Alabama, so you would be well advised to learn as much as possible about the process before getting started.