Splitting Retirement & Stock Assets in California Divorces with Elizabeth Van Clief

Navigating the division of assets in a divorce can feel like trekking through a legal labyrinth, but fear not, as this episode promises to be your guiding light.  Host Scott Levin is joined by attorney Elizabeth Van Clief and financial forensics guru Ashlyn Downing to dissect the complex process of splitting restricted stock units and retirement funds during divorce. 

The discussion introduces concepts of separate and community property, and how an asset can be both. Figuring out how to divide RSUs and 401ks, IRAs and pensions often require the assistance of financial analysts who are able to provide clear understanding as to the community value aka the portion that is jointly owned.  

Learn a bit about what is up grabs and what stays in your corner when the dust settles in the Golden State's community property ring. This conversation is peppered with insights that will introduce you to valuation issues surrounding the financial fray of divorce from some of the top respected experts who tackle them. 

Thanks for listening and I hope you'll continue to learn more about how you can peacefully divorce.

As a divorce mediation attorney in California, Scott Levin helps couples figure out the settlement terms and draft enforceable settlement agreements so they can divorce fairly without needing to go to court. Obtain closure peacefully through an amicable divorce. process that protects families and kids.

Visit San Diego Divorce Mediation for more information and to learn more about our mission to help divorcing couples make informed decisions and fair agreements through mediation or book a free virtual consultation.

Scott Levin, attorney, mediator, CDFA®
Chief PeaceKeeper
[e-mail]
858-255-1321
San Diego Divorce Mediation & Family Law
www.SanDiegoFamilyLawyer.net

Episode Transcript

Speaker 1 (00:02):
Hey everyone.
This is Scott Levin, chiefPeacekeeper.
I'm a family law attorney thathelps people mediate divorces.
I'm here with Elizabeth VanCleep and Ashlyn Downing today.
How are you all Good?

Speaker 2 (00:14):
Hi Fred.

Speaker 1 (00:16):
So this is going to be a really interesting
conversation for those that areinterested in the subject.
So when you're going throughdivorce and you have
compensation for executivescalled restricted stock units,
or if you have retirement assetsthat were earned before
marriage but are partiallyearned before marriage, or

(00:37):
there's contributions after thedata separation, there's all
these things that make assetspartly community, which are what
you divide in the state ofCalifornia during divorce, and
partly separate and, with theexecutive compensation,
restricted stock units.
Those two could be things thatyou divide during the divorce

(00:57):
and then there's a portion thatbecome just separate property
and then there's a portion thatare separate and shared.
So it can get very complicated,and these two young ladies here
are the people that you hire tofigure things out as to what's
separate, what's community andhow do we divide these assets
that are not always sostraightforward.

(01:18):
So, Elizabeth, let me pick onyou for a second.
Tell us what do you do on adaily basis.
Did I describe that right?
Is that pretty much where yourwork is?

Speaker 3 (01:30):
Yeah, thank you, spad .
So essentially what we do is wecombine legal services with a
little bit of forensic review ofaccount statements to determine
community property and separateproperty and a whole host of
assets, and the main ones arerestricted stock units, stock
options and retirement benefits.

(01:52):
So what you'll see when youcome to our firm is you'll see
us do an analysis of what'scommunity property that is
available for division if we'redividing community property
equally which most of the timewe do and what's separate
property which is going to becarved out and kept separate
property for the person thatearned the benefits and then we

(02:16):
prepare the court order orwhatever legal language Scott
needs to put into the maritalsettlement agreement.
So it all connects together andonly the community property
interest is divided.

Speaker 1 (02:31):
So how do you get into that?
So you're an attorney with afinancial kind of focus.
How do you find yourself withthe firm?
How did you fit this section?

Speaker 3 (02:41):
Yeah, so I'm actually a math major from college and
then I went and got my degree atthe University of San Diego
School of Law and then I got atax master's.
And how I explain it is allthese things that Ashlyn and I
do together at the firm.
It's all kind of based in theinternal revenue code because it

(03:02):
has some sort of pre-tax orpost-tax aspect to it and that
way, in order for it to bepre-tax and have these
attributes, it has to follow therules of the internal revenue
code.
So if you think aboutretirement assets, they're
pre-tax for 1K plans and becauseof that they have to fall

(03:24):
within certain requirements ofthe internal revenue code.
So when you think aboutretirement benefits and stock
options, it's actually like asubset of being a tax law
attorney, and so we kind of mixAshlyn's ability to do tracings
and financial work with myability to write the court order

(03:45):
and understand that all ofthese assets have different tax
requirements and you have towrite the court order in a
certain way so that when wedivide stock options it doesn't
trigger a sale.
When we divide retirementbenefits, it doesn't trigger a
taxable distribution to theopposing side.

Speaker 1 (04:04):
Yeah, so really what Elizabeth does in terms of.
So I'm a mediator, so when myclients work with me, we say,
okay, here's, here's what wehave.
We have this asset and I thinkand one of them will say, I
think you know, I earned part ofit before marriage, so maybe we
can figure out what that is sowe send them to Elizabeth and
Elizabeth does that math, or, inAshlyn, the firm, and they

(04:24):
figure out and they come backand say here's how we would
divide it pursuant to the law.
And then they secondarily goanother step and they give you,
they give me, the language thatwe need to put in to the judges,
to the judgment, so that thejudge understands what, what
that, what that division is.
And secondarily, they thenactually perform that division

(04:47):
by sending it to the retirement,where the, where the funds are
held, and to the company andthey say here, here's how you're
actually going to divide it.
And that's through what's likeall the quadro or you know other
other instruments like that.
It's really like threefold.
It's the math, it's thelanguage that goes to the court
and then it's the actualperforming of the division.
And what's great about this firmand why I wanted them on today

(05:09):
is because you don't have to doanything but give them the
information, because they'regoing to go off and do all the
work, which is why I love them,because what I tell people is
hey, I didn't.
I don't remember my first orsecond or third year law school
them teaching math because wedidn't do a specialty right, so.
So that's why we have mathexperts.
Ashton, what's your role at thefirm?

(05:31):
How do you?
How do you come into play here?

Speaker 2 (05:33):
So I'm our financial data analyst, so I do a lot of
the Excel work and so I'm theone to request statements.
Typically I analyze thestatements, I do the data entry
and the analysis for a wholerange of the services we offers.
We do we do the retirementaccounts, we do the equity
compensation.

(05:54):
We will assist with Smith Oslersupport which goes along with
the stock option compensation.
We will occasionally do postseparation accountings of
checking savings accounts,especially in cases where you
know the parties separatedseveral years prior and sort of

(06:15):
co mingled funds for a couple ofyears Before they really
divided their finances up.
So we get called into kind oftake apart some of the more
complicated cases where you haveall of these different accounts
that are all tied together.
That's a lot of what we do.

Speaker 1 (06:37):
Interesting.
So what percent?
So I, as a media, I don'tlitigate anymore.
I haven't for over a decade,elizabeth, what percentage of
your?
I mean, do you have apercentage of cases that are
litigation and versus mediationfocused, or is it?
Is it hard to say?

Speaker 3 (06:53):
Well it's.
It's interesting because Iwould say about 90% to 95% I'm
jointly retained.
Five to 10% I'm retained justby one party and normally that
indicates that there's some sortof concern that the other party
might not cooperate, or or it'sat the beginning of the case

(07:17):
and a family law attorney reallywants a independent advisor
that's going to be with them theentire case and ask
confidential questions andthings like that.
So but however, in terms of howmany times we go to trial, I
would say about 10 trials a year.
And the one thing I wanted tomention is that even when I'm

(07:39):
jointly retained, sometimes itcan still be a conflict or a
trial situation because I can beretained as a 730 expert.
So I prepare a report, I do theinterview, you know we attach
Ashland's analysis and presentit to the parties, answer
questions.
If they both agree, then wedon't have a hearing.

(08:00):
I implement what the reportsays.
If the report has great areaslike there's 10 years where we
couldn't get statements and sowe did a good faith estimate but
the party still want to go inand talk to the judge about, you
know, burden of proof andshould it be a little bit less
or more than I will go andtestify, still as a neutral

(08:23):
party, but because they need alittle bit of the court's
assistance in resolving it or inmediation.
But it is relatively rare tohave to go to court because the
report is normally sufficient toenable people to have trust and
understand that it's likely theoutcome that it would be in
court anyway, and so it canreally foster resolution and

(08:47):
eliminate a lot of thedisagreement between the parties
when we get involved andpresent what you know
financially exists out there.

Speaker 1 (08:54):
Yeah Well, I mean, we could go on forever.
I don't want to get too indepth, but really I think that
the Van Cleef, you knowElizabeth, ashland, this firm
they're the most in demand lawfirm that I know of.
I mean any other referralsource I have, you know they are

(09:16):
good but not as in demand asElizabeth has become.
So I think it's awesome thatyou were able to take the time
for me today, thank you.
I hope that people willunderstand that when you have
these sort of financial issuesthat are going on during or
after divorce, that you reallyshould reach out to the firm and

(09:37):
give them a call and see howthey can help, because they're
really the go-to experts in thisfield.
I fear that Ashland will now bepitched by a lot of family law
and and and and and you knowDavid asset division firms for
her expertise.

Speaker 2 (09:54):
But now just teasing.

Speaker 1 (09:55):
But thanks so much for joining me, guys, and I'll
post all the contact informationin the description, but I
really appreciate you aboutbeing here.

Speaker 2 (10:02):
Thanks for having us.

Speaker 1 (10:03):
Thank you, soon.

Speaker 2 (10:05):
Bye, bye.