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Will I Lose My Stock Options In A Divorce?


Many people are constantly surprised by the assets that come into play during asset and debt distribution during a divorce. Stock options are given to many employees as a form of equity compensation by their employers, but many employees forget about these options, or fail to consider them as compensation. However, when dividing assets during a divorce, they must be properly accounted for and considered.

What are Stock Options?

Stock options are given by an employer to their employee, generally as an incentive or perk. Stock options give the employee the right to purchase stocks in the company in the future at a specified price (and in a specified amount) in the event that the company goes public. In other words, a stock option is nothing tangible. The company is not actually giving the employees stock or shares or ownership in the company, but simply the option of purchasing it in the future if it becomes available due to the company going public. Because this can feel quite tenuous and more like a possibility than an asset or piece of property, many people fail to consider or even disclose stock options during a divorce. However, this is a mistake.

Are Stock Options Marital Property?

The biggest legal determination when it comes to dividing property in a divorce is whether the property is separate or marital. Separate property is generally property that was acquired prior to the divorce, while marital property was acquired during the course of the marriage, even if it was acquired solely by one spouse. If stock options were acquired during the course of a marriage, they are considered marital property. Because Florida is an equitable distribution state, your spouse is entitled to an equitable share of your property. A judge will determine what an equitable share should be in your case by considering a number of factors. Generally, your spouse will not receive any of your stock options, but you may be required to pay them the value of their equitable share of the stock options. Of course, it’s important to remember that a judge only gets to decide the fate of your assets if you and your spouse are unable to come to an agreement on your own. You may mutually decide that you can each keep all of your own stock options and retirement benefits, or it may be decided that you will keep all of the stock options in exchange for your spouse receiving a larger share of equity in the home. Additionally, if you have a prenuptial or postnuptial agreement that outlines how stock options should be treated in a divorce, that agreement will dictate.

Contact the Greater Orlando Family Law Center

If you are going through a divorce, it’s important to ensure that you are able to negotiate a fair and equitable settlement and retain the assets that matter most to you. Contact the experienced Orlando divorce attorneys at the Greater Orlando Family Law Center today to schedule a consultation.

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