YLaw Wins Landmark Case on Executive Compensation and Child Support

After working tirelessly, our YLaw lawyers Abib Ngom and Ari Wormeli were able to secure a landmark victory in Dv v. Dv, helping protect business executives and high-income earners from unfair child support claims based on complex executive compensation structures.

At YLaw, we understand that for most business executives and owners, income isn’t always as simple as a monthly paycheck. It’s important to have experienced and knowledgeable lawyers on your side who understand your executive compensation structure, so your child support payments can be calculated accurately.

The Facts of the Case on Child Support

After two decades of marriage and raising two children together, a couple with high net worth made the difficult decision to separate.

The father had a executive compensation structure that included a Long Term Incentive Plan (LTIP), with stock options that appeared substantial on paper but wasn’t actual cash, which made untangling their finances difficult.

On his 2019 tax return, the father’s income appeared enormous due to the value of the stock options. The mother demanded retroactive child support for 2020-2021, and insisted that the support should be based on the inflated stock values. In reality, that wealth was only on paper and he didn’t actually receive the cash until 2021.

While the fight was happening, the lawyers negotiated a deal for future child support. Through emails, the mother agreed to accept $6,900 per month. But shortly after agreeing, she thought she would be able to get more support and changed her mind.

She claimed her lawyer made a mathematical mistake and demanded over $10,000 per month instead.

The Ruling on Executive Compensation and Child Support

The court dismissed the mother’s application and ruled in favor of Wormeli and Ngom’s defense on both issues.

The judge agreed with our argument: you cannot pay child support with money you don’t have. We successfully proved that “deemed” stock value is not the same as available cash flow and convinced the court that he did not owe the massive retroactive payments the mother was demanding since he hadn’t received the cash in 2019.

Furthermore, the judge ruled that the email correspondence between the lawyers created a binding contract and the original deal of $6,900 stood.

What does this mean for you?

At YLaw, we know how to properly protect your assets. If you are an executive, business owner, or high-income earner, standard divorce formulas often fail to capture the reality of your finances. We are here to provide the expertise you need for a fair ruling on calculating child support based on executive compensation.

• We Understand Complex Executive Compensation: Other lawyers look at the bottom line of a tax return and stop there. We dig deeper. By understanding how to properly differentiate between taxable income (like unvested stocks or phantom income) and actual cash flow and income when separating finances, we’ll make sure your support payments are based on reality.
• We’ll Protect You Against Settlement Reversals: One of the most frustrating parts of divorce is reaching a settlement, only to have your ex change their mind and ask for more. We lock down settlements so that when a deal is made, you can finally move on with your life without fear of it being reopened.
• We Defend Against Unfair Retroactive Claims: Retroactive support claims can be financially devastating, creating massive debt overnight. We rigorously analyze the timeline of your earnings to defend against unfair historical claims, so that you only pay what is fair and legally required.

Are you facing a complex support dispute involving stocks, bonuses, or business income? Contact us or call us at 604-974-9529 today to ensure your income is calculated fairly.