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Are stock options included in your marital property?

One of the major aspects of divorce is the division of marital assets. For instance, you and your future ex-husband will have to decide if one of you will keep your Antioch home or whether you should sell it and split the proceeds. You probably have other high-value and complex assets that you also need to divide as part of your divorce settlement.

Stock options and restricted stocks fall into the realm of complex assets that are often hard for divorcing couples to properly valuate and divide. In order to ensure that these assets receive the proper valuation in your divorce, it is vital that you understand these assets and the available options.

Stock options & restricted stock

In general, stock options are benefits that employees receive to buy company stock at a specific price in the future. The point of this benefit is that the employee would be able to buy the stock at a much lower price than the market value on the day that he or she chooses to exercise the option. Restricted stocks are company shares that an employee receives at no cost, but the employee has to fulfill certain conditions like remaining with the company for a specific amount of time.

Be sure the assets exist

In order to ensure that you receive your fair share of the marital property in a divorce settlement, you have to know about all of the property that both you and your husband own. Stock options and restricted stock are not something that you can see on a spouse's W-2 or tax returns. They only become obvious when the individual exercises the stock options or when the restricted stock becomes vested. This means that the only way you might find out about them is if your spouse freely discloses their existence. In order to determine the existence of stock options or restricted stock, your attorney might have to go so far as to subpoena the human resources director at your spouse's place of employment.

Determine value

The ease of determining the value of stock options and restricted stock will primarily depend on whether they represent a company that is private or publicly traded. The financial information of a publicly-traded company is typically easy to find and makes determining the current value of the options much less complicated. However, if the company is private, it will require considerably more work. Fortunately, this is not something you have to do yourself. An experienced financial adviser should be able to help you to determine the value of stock options or restricted stock.

If you are planning to divorce, it is important that you not only identify all of the marital assets to which you have rights, but also understand their basic natures. If you think that stock options or restricted stocks might be part of your divorce settlement, be sure you find out everything you can about them to ensure you receive your fair share.

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