John and Margo Discuss Retirement Assets with Attorneys in the DC Metro Area
They also explored the complexities of stock options and employee benefits, highlighting their advantages and potential pitfalls.
On Thursday, November 21, 2024, Margo Cook (President, Wealth and Engagement Planning) and John Dame (General Counsel) presented “Understanding the Nuances of Retirement Assets” to the Family Law Section of the Montgomery County, Maryland Bar Association.
Margo and John discussed a range of retirement assets, including 401(k)s, Traditional and Roth IRAs, Pensions, and Annuities. They also explored the unique challenges family law attorneys face when addressing employee stock options in the context of divorce.
“It is essential for both individuals navigating divorce and their attorneys to understand the critical role of account selection during negotiations,” said Margo. “Achieving post-divorce financial stability often depends on selecting the right mix of assets. This isn’t just about equitable distribution—it’s about the equitable distribution of the right assets for the client, tailored to their cash flow needs and long-term tax strategies. For instance, retaining a combination of a 401(k), a Roth IRA, and a taxable investment account can be far more advantageous for a client with immediate cash needs than holding onto the marital home and a single retirement account.”
John highlighted the complexities of dealing with employee stock options in divorce settlements. “Clients often gravitate toward these options because they perceive them as particularly valuable or as a direct result of their contributions during the marriage,” he said. “However, these assets come with unique risks that need to be carefully considered.”
John continued: “Negotiating for stock options, especially on an if/as/when basis, can introduce significant uncertainty. The business could underperform or fail, or the employee spouse might leave their role, either voluntarily or involuntarily, jeopardizing the value of the options. Understanding these potential pitfalls is crucial for making informed decisions.”
Both Margo and John underscored the importance of tailoring asset division strategies to meet the long-term goals and immediate needs of divorcing clients. By understanding the intricacies of various asset types, attorneys can better guide their clients toward achieving financial security and stability in the aftermath of divorce.
Rothschild Capital Partners is available to present at your conference or event on these topics and more. Please reach out via connect@rothcap.com if you wish to invite us to speak.
