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How stock options and restricted stock factor into divorce

On Behalf of | Mar 20, 2014 | Divorce

When a couple decides to get a divorce in Texas, the division of assets is typically one of each person’s top concerns. However, many types of assets — such as stock options and restricted stock — could slip through the cracks when making these decisions. These types of assets should always be considered within the divorce proceedings to ensure that the assets are fairly divided between each party.

Stock options are available for employees to purchase with the idea that the stock will be bought cheaper and sold for a profit. Restricted stock are guaranteed to employees after certain conditions are met. Stocks such as these have the potential to be incredibly valuable in the future; therefore, they are applicable to be divided during a divorce, even if the process is difficult. When dividing these assets, there are certain elements that each party needs to keep in mind.

It is crucial to understand the stock and the stipulations surrounding it in order to make sure that the individual actually qualifies for it and owns it. It is also vital to evaluate the worth of the stock, including tax estimates. Finally, each party needs to take the estimates and make sure that the stock is divided fairly.

Dividing these types of assets is sometimes a difficult process. Especially in order to make sure that the stock is divided fairly between both parties, the parties may elect to seek professional assistance. A financial expert or other professional could help them to better understand the best way to effectively evaluate and split these divorce assets according to the community property laws in effect in Texas.

Source: Forbes, Dividing Stock Options And Restricted Stock In Divorce, Jeff Landers, March 19, 2014