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Dividing Stock-Related Assets

Posted on in High Asset Divorce

Texas divorce lawyerCouples who divorce in Texas must divide their assets on an equitable and fair basis. This includes bank account funds, vehicles, real estate, personal property, retirement funds, and even debt. However, property division can become difficult when a diverse range of assets are involved. For example, many high asset divorces involve the division of stock options, which are divisible in some, but not all situations. If you own stock options and are concerned about how or if they will be divided upon divorce, please contact an experienced Cedar Park high asset divorce attorney who can explain your options.

Separate Property Calculations

Like any other type of property owned by a couple, stocks can be divided during divorce, but only if they are considered marital property. If, for instance, a spouse owned stock as separate property prior to the marriage, he or she could retain sole ownership of those stocks. However, this only applies if the spouse participates in a stock option plan that is provided by their employer and the option or stock was granted before the marriage, but needed to continuously remain employed during the marriage before the option could be exercised. In these cases, the spouse’s interest will be equal to the fraction of the option in which the numerator is the sum of:

  • From when the option was granted until the date of marriage; and
  • From the date of dissolution until the date the option could be exercised.

The denominator in this calculation is the period from the date that the stock or option was granted until the date the grant could be exercised or the restriction removed. If, on the other hand, the option was granted during the marriage, but still requires continued employment before it can be exercised, the spouse’s interest will be equal to the fraction of the option in which:

  • The numerator is the time from the date of dissolution until the option could be exercised; and
  • The denominator is the time from when the stock was granted until the date it could be exercised.

Although the Texas Legislature specifically put this calculation in place to apply to stock options, there is really no hard and fast rule for how stock is divided. Instead, courts are encouraged to assess a variety of factors, including: the date the stock was granted, the date the stock vested, and the reason why the option was initially obtained.

Get Legal Advice Today from a Talented Cedar Park High Asset Divorce Attorney

To speak with an experienced Cedar Park high asset divorce lawyer about your own property division-related issues, please contact The Law Offices of William D. Powers. Our skilled legal team has significant experience assisting clients in the area, and we are prepared to begin working aggressively on your behalf. A member of our legal team is standing by to begin helping you with your case.

 

Sources:

https://www.forbes.com/sites/jefflanders/2014/03/19/dividing-stock-options-and-restricted-stock-in-divorce/#5d8d9dd31c8e

http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.3.htm

The Law Offices of William D. Powers

8911 N. Capital of Texas Highway, Building 2, Suite 2105, Austin, TX 78759