A married individual who has stock options shares those options/grants with his/her spouse, assuming the stocks were acquired during the marriage. Thus, any stock options you own may become part of your community property that is divisible during your divorce.
How Will We Divide Stock Options?
Stock options are different from many other types of property. They are not tangible and you may not be able to immediately divide them. Unlike your cars, your home(s), and even your bank accounts, dividing stock options is a unique and complex undertaking.
First, you’ll have to identify the stock options that you or your ex-spouse has. This often requires the help of an attorney or forensic account who can investigate your ex’s finances. Then you’ll have to value the stock options, which experts may do using complex formulas.
Now, you’ll have to decide how to divide the stock options. You might determine the value of the unexercised stock options and your ex can buy out your shares, for example. Or you might collect a certain amount based on a particular formula once your ex-spouse exercises the stock options. The formula may depend on how long you were married, how many years your spouse worked for the company granting the stock options, and more.
In some cases, the couple will have to go to court to decide how to divide the stock options now, or how to distribute the stocks once exercised in the future.
Talk to an Attorney about Property Division during Your Divorce
Keep in mind that this is a brief and general overview of how stock options affects property division. There are a host of other factors that may affect your divorce and the stock options in question. So make sure you work with an attorney you trust and who is familiar with these complex financial matters that may arise during divorce.
The Law Office of Molly B. Kenny can help you understand your options based on the details of your case. We will represent you during negotiations to reach a settlement with your ex-spouse or represent you in court if a judge must decide how to divide the stock options and other assets.
To set up a consultation about your case, call 425-460-0550 now. You can alternatively use our contact form to reach us.