How are Stock Options Treated in Divorce Settlements?

How are Stock Options Treated in Divorce Settlements?

stock options

How are Stock Options Treated in Divorce Settlements?

The property distribution process is often one of the most contentious parts of a divorce. It can get especially tricky when dealing with assets like stock options. Can your spouse end up with a share of these even if they were earned from your job? In some cases, yes. Our Chatham property distribution attorneys can help guide you through this and protect as many of your assets as possible.

Can Stock Options Be Divided Up Like Other Assets?

Yes, in some situations assets like stocks will be divided up during a divorce. This can include stock options given to one partner as part of their compensation at work. If you earned these options before you were married, they are unlikely to be subject to property distribution. However, some situations can arise where those stock options you earned during your marriage can end up going to your former spouse.

When Can My Spouse Take Stock Options I Got From Working?

If a spouse is going to make an argument that they should get some of your stock options, they usually need to be options that were earned during the marriage. When they vest can also matter. For example, some stock options that vest prior to the date of your divorce complaint could certainly be divided up among a divorcing couple. Our lawyers can look at your portfolio and vesting schedules to tell you more about which stock options could be vulnerable.

What Arrangements Can Be Made to Keep My Stocks After a Divorce?

If you are insistent on keeping the bulk of your stock options after a divorce, you will usually have to give something up in return. This could mean:

  • Giving your former spouse assets that are equal in value to these options
  • Having your company transfer some options to a non-employee spouse
  • Selling off some vested stocks and split cash
  • Agreeing to sell some vested stocks and splitting the proceeds in the future.

New Jersey is an equitable distribution state, which means that assets are supposed to be split up in a fair way after divorce. This can mean that your spouse could get a larger share of the marital assets due to factors like their income, age, and health. In any case, if you want to keep as many of your stock options as possible, you are going to want to talk to a lawyer. We can use documents like your stock plan statements and vesting schedule to help you keep these valuable assets that could continue to grow.

Contact Us Today

So if you are looking for ways to protect your assets in a divorce, contact Lazor Rantas, PC. We can schedule a consultation and take a closer look at your case. If there is anything that our experienced family lawyers can do to help you, we’ll let you know which steps to take next.

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