How Are Stock Options Treated in a California Divorce?

stock board

While some assets may seem easy to split during a divorce, others can be incredibly challenging. For example, splitting a bank account is relatively simple when compared to dividing your business. One of the most confusing assets to split between spouses is stock options. If you or your spouse have this kind of asset, you’ll want to keep reading to learn what will happen to them during your California divorce. Additionally, you’ll learn how a Los Angeles division of assets attorney can help you navigate the complexities of this matter.

What Are Stock Options?

Stock options are an increasingly common form of compensation for employees. Generally, as part of a benefits package, start-ups, and other companies will offer employees the opportunity to buy shares in the company at a pre-determined, discounted price. As such, when the company does well, the stock will increase in value. As such, these stocks represent potential profit until they have vested.

How Does California Handle These Assets?

Before learning how these assets are divided, you must first determine whether or not they can be split. In California, any asset obtained during the marriage is considered marital property, even if there is a stock option that has not vested yet. If the spouses cannot agree on how to distribute their property, the court will intervene. As such, California is a community property state, meaning all marital assets will be split 50/50.

However, because these options represent potential profit when unvested, splitting them may seem challenging. However, several options are available for these circumstances to help both spouses feel like they are being treated fairly. One option is to determine the value based on the state of the market at the time of the divorce and then provide the non-employee spouse with other assets of equal value. Similarly, the company may agree to transfer a portion of the assets to the other spouse.

Why Should I Connect With an Attorney?

As you can see, handling complex assets can be an incredibly overwhelming matter. As such, reaching out to an attorney can help ensure these options are handled with care.

Unfortunately, trying to handle these matters by yourself can have a less-than-ideal outcome, as you can make errors that financially impact you for years to come. Additionally, if your spouse is the one holding the options, an attorney can help ensure these assets are properly valued to ensure you receive the funds you are entitled to.

If you are going through a divorce where many complex assets must be divided, the team at the Zitser Family Law Group is ready to help. We understand how complex these matters can be, which is why we are here to guide you through the property distribution process. Our firm has experience handling high net worth divorces and complex assets. We can handle the legal proceedings while you focus on pursuing the next chapter of your life. Contact us today to learn more.

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