Are stock options considered in a divorce?
Stock options, both vested and unvested, are considered assets in a divorce that can be divided between the spouses. The most common way to divide stock options is for the divorcing employee to retain the stock options and award the nonemployee spouse other marital assets of equivalent value as an offset.
Can stock options be transferred?
Transferable options are nonqualified stock options (NQSOs) that you can give to certain permitted individuals or entities if your company’s stock plan allows such transfers. The transfer of the vested option is treated as a completed gift for gift-tax purposes.
Are restricted stock units transferable?
Restricted stock is non-transferable and must be traded in compliance with special Securities and Exchange Commission (SEC) regulations. The restrictions are intended to deter premature selling that might adversely affect the company. Restricted stock is also referred to as “letter stock” and “section 1244 stock.”
What is the difference between shares and share options?
What’s the difference between stocks and options? The biggest difference between options and stocks is that stocks represent shares of ownership in individual companies, while options are contracts with other investors that let you bet on which direction you think a stock price is headed.
Can you go after your husband’s stock options during a divorce?
If your husband has stock options or RSUs in his company, these options are valuable assets that you CAN and SHOULD seek during a divorce. (If you are the one with the stock options or RSUs, this works both ways.) Going after your spouse’s stock options and RSUs during a divorce can be tricky, mainly because the value will change over time.
Why is my spouse not providing full financial disclosure?
One common reason why an individual may not provide full financial disclosure is because he or she is dissipating assets. What this means is that he or she is either spending money or getting rid of assets in an effort to reduce what the other spouse may be entitled to during the property division process.
Can a high earning spouse hide assets during a divorce?
A high-earning spouse isn’t exactly happy to hand over his assets to his soon-to-be ex, especially if they live in a Community Property State that requires couples to equally split their marital estate. Hiding assets during a divorce is more common than you might think, and we’ve written a few articles here at WIFE about how to
Do you have to disclose assets in a divorce?
I write for women going through financially complex divorces. It’s a legal requirement of all divorcing couples: Each spouse must openly and honestly disclose all assets (and income, expenses and debt).
Can a spouse have unexercised stock options in a divorce?
If a spouse has unexercised stock options, the first step will be to determine which options, if any, are considered marital. One might assume that any options granted during the marriage are considered marital. However this assumption is not entirely correct. Options are often granted as a reward for past work and as incentive for future work.
Can a former spouse transfer a stock option?
As you may have noticed, actually dividing the ownership, or transferring the option itself to a former spouse is not mentioned as a potential distribution method. This is because the vast majority of employee stock option plans explicitly prohibit the assignment or transfer of rights in the options.
When do stock options vest in a divorce?
That option will be considered “unvested” until 2015. As you can imagine, a vesting schedule will complicate the division of stock options incident to divorce even further. Consider the above example where the option was issued in 2005 but not vested until 2015.
Can a spouse have unvested stock options in North Carolina?
Yes. In North Carolina both vested and non-vested stock options are subject to distribution. So, if a spouse has unvested options those options must still be classified as marital or separate, valued, and divided. In the above example, a portion of the unvested stock options would be subject to distribution.