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Stock options and restricted stock award assets in a divorce

| Apr 21, 2021 | Divorce

California citizens that go through a divorce know that it can be extremely complex and time-consuming. Once more money is involved, it can get even more complicated because you’ll have to deal with specific aspects, like restricted stock awards and stock options, that aren’t involved in a typical marriage. It’s vital to understand what these assets are so that you can properly ensure you’re getting your fair share.

Understanding stock options

When you go through a divorce, you’ll have to split up all your marital assets. Pinning down all these marital assets can be a bit difficult when you’re dealing with a lot of wealth. One asset you’ll need to look for is stock options. In a nutshell, employers provide stock options as a way for employees to purchase a stock at a set price instead of the current price.

The catch is that an employee may not purchase the stock option for a period of typically one to five years. Essentially, your former spouse may have stock options from his or her employer that you may not have been aware of since he or she cannot touch them for a set period of time. However, it’s important that you address these stock options in your divorce decree because they can allow you to cash in on a good bit of money when it’s time to buy the stock.

Restricted stock awards

Somewhat similar to stock options, restricted stock awards are presented to employees early on in their employment. Just like with stock options, with restricted stock awards, individuals have to wait a specific period of time before they can do anything with the stocks. This is referred to as the vesting period. Do yourself a favor, and see if your former spouse has any restricted stock awards because you’re entitled to them as well.

Going through divorce as a wealthy couple has many different aspects that do not pertain to the average divorce. Two very important assets that you need to be on the lookout for include restricted stock awards and stock options. You will want to consult your divorce lawyer about determining whether your former spouse has these and how much you’re entitled to.