How are stock options handled in a divorce?

If you or your spouse have stock options or restricted stock options in the company for which you work, these become assets the court will divide when you divorce. They are like any other asset, but because they are variable when it comes to value, it can be tricky to know how to handle them.

According to Forbes, it largely depends on whether you or your spouse hold stock options or restricted stock.

Stock options

Stock options are the right to buy stock later at a certain price. The price is often lower than what the stock will sell for. Unexercised stock options may not be worth much because they have no real monetary value until you actually buy the stock. There is no way to figure out how much they would be worth.

You may have no choice but to divide them evenly. For example, if you own four stock options, then you can keep two and your spouse gets two. It is difficult to give up assets to keep all your options since you do not know the value.

Restricted stock

Restricted stock is that which you get for free but that has conditions you must meet before they become valuable. If you have not met the conditions, then these options are worthless.

Again, you may need to split them evenly, but your spouse may not accept this since you could fail to meet the conditions, making them worthless. However, you can often figure the value based on current stock prices, which can make it easier to divide them or to offer them up in exchange for assets.

Recent Posts



Map & Location