Phyllis G. Bossin & Associates LPA

03/25/2022

Incentive Compensation, RSUs, and PSUs – Income or Property?

The treatment of restricted stock units (“RSUs”) and performance share units (“PSUs”) can be a contentious and confusing topic in family law cases. One area where there seems to be no disagreement is when incentive compensation such as RSUs and PSUs have vested prior to the date of divorce (or property division), in which case they are treated as marital property subject to division. For incentive compensation that has not yet vested, things are less clear. Is it property? Income? What impact, if any, do it have on support calculations? Like many topics in law, the answer often depends on the facts of the case; however, a recent decision from Ohio’s Tenth Appellate District examines the issue in a clear and helpful way.

In Mayer v. Mayer, Husband/Appellant argued that the trial court erred when it failed to take Wife/Appellee’s future incentive compensation, including RSUs and PSUs, into account when making its determination of child and spousal support. At trial, Wife took the position that RSUs and PSUs were treated as property, and that the court would be double-dipping by taking them into account for support purposes (as they had already been divided). The trial court agreed, expressly finding that incentive compensation is “property, in accordance with the majority of Ohio cases.” (Citation omitted).

The appellate court was not so convinced, first drawing a sharp distinction between incentive compensation that vested during a marriage and future incentive compensation and noting that many of the cases cited by the trial court failed to even address the second issue. The decision then went on to examine several relevant cases from Ohio’s Twelfth District, Ghanayem and Gaffney, ultimately finding that Wife/Appellee’s incentive compensation “is simply bonus compensation that must be included in her gross income for purposes of calculating spousal support.” While acknowledging the difficulty that this could present for a finder of fact, the Tenth District noted that this is irrelevant when making an initial determination of whether incentive compensation is income or property – the issue before them on appeal.

Should unvested future compensation be treated as Tier 2 spousal support? How can PSUs be reduced to a present value for calculation of a support award? Like the decision in Mayer, these are questions beyond the scope of this article. One thing seems likely, however: even outside of the Tenth District, the trend of ignoring future incentive compensation when determining support awards seems to be on its way out in Ohio.

Sources: Mayer v. Mayer, 10th Dist. Franklin No. 21AP-3, 2022-Ohio-533.

02/25/2022

In March of 2021, President Biden signed a roughly $1.9 trillion COVID-19 relief bill, the American Rescue Plan, into law. One of the Plan’s measures was aimed at providing relief to families with children by increasing the child tax credit from $2,000 to $3,600 per child for children ages 5 and younger and $3,000 per child for children 6 to 17. More importantly, the bill provided some of the credit in advance, sending checks to eligible families for up to half of the total amount of the credit between July and December of 2021. In other words, rather than having to wait to file their tax returns to get the child credit, taxpayers were now actually receiving the payments directly in cash.

However, the increased benefits were only temporary, expiring at the beginning of 2022. In other words, the child credit reverted to $2000 starting January 1, 2022 and will be reflected when people file their 2022 taxes in 2023. There has been a stunning consequence of the lapse of the increased child credit and the payment of it directly to the taxpayer. Specifically, an estimated 3.7 million children have fallen below the poverty line since the beginning of the year. The overall child poverty rate in the U.S. has risen by almost 5%, from 12.1% to 17% in that time. While the child tax credit still exists, having simply reverted to the $2,000 cap, the positive effect of the 2021 monthly payments cannot be overstated. An estimated 36 million households and 61 million children received payments last year, and the subsequent 41% increase in child poverty rates shows just how important those funds were to struggling families. We can and must do better.

Sources:

https://bit.ly/3ImXUEx

https://bit.ly/3piTIxR

The 2022 child tax credit is set to revert back to $2,000 for each dependent age 17 or younger.

01/10/2022

Phyllis Bossin has once again been named as an Ohio Superlawyer in Family Law. She has also once again been named in the Top 50 Women Lawyers in Ohio, Top 25 Women Lawyers in Cincinnati, Top 50 Lawyers in Ohio, Top 25 Lawyers in Cincinnati, Top 10 Lawyers in Ohio, and Top 5 Lawyers in Cincinnati.

Phyllis Bossin is one of the top rated Family Law attorneys in Cincinnati, OH. She has met the stringent Super Lawyers selection criteria.

12/22/2021

Phyllis Bossin has once again been named in 2022 in Best Lawyers in America and U.S. News and World Report's Best Law Firms.

Search the elite group of lawyers from Phyllis G. Bossin & Associates, L.P.A who have also made the Best Lawyers in America list.

04/03/2021

What you need to know about the American Rescue Plan of 2021

As a result of the COVID-19 pandemic, Congress passed, and the President signed into law, the American Rescue Plan of 2021. This new law provides for increased tax benefits for families for 2021 only.

03/11/2021

Women Who Move Cincinnati 2021

Issuu is a digital publishing platform that makes it simple to publish magazines, catalogs, newspapers, books, and more online. Easily share your publications and get them in front of Issuu’s millions of monthly readers. Title: Women Who Move - March 2021, Author: Cincinnati Magazine, Name: Women ...

12/18/2020

Phyllis Bossin Honored by Super Lawyers

Phyllis G. Bossin was once again named to the Super Lawyers list for 2021. She has been named one of the Top 25 Women Lawyers in Cincinnati, one of the Top 50 Women Lawyers in Ohio, one of the Top 5 Lawyers in Cincinnati, and, most distinctively, one of the Top 10 Lawyers in Ohio!

Phyllis Bossin is one of the top rated Family Law attorneys in Cincinnati, OH. She has met the stringent Super Lawyers selection criteria.

06/29/2020

How far does physician-patient privilege extend in custody and spousal support cases?

Generally, physician-patient privilege refers to rules that prevent doctors from testifying about communications with patients that occur during treatment. The protections offered by this privilege

05/09/2020

Divorce During COVID-19

Being at home with a spouse during a stay-at-home order can exacerbate an already fragile marital situation. Everyone is experiencing high levels of stress and anxiety. Some people are losing their

04/22/2020

Update: Domestic Violence and COVID-19

I have previously written about the inevitable spike in domestic violence and child abuse cases resulting from the stay-at-home orders, which, of course, are absolutely necessary to stop the spread of

04/16/2020

Stay-At-Home Orders and Domestic Violence

I previously posted on March 25 about the increased risk during this period of stay-at-home orders to victims of domestic violence. There is now significant data showing a marked increase in the

04/15/2020

Child Custody and COVID-19

COVID-19 has created chaos for many divorced and separated people who have children. The New York Times recently wrote an article called: New Battle for Those on Coronavirus Front Lines: Child