Property division negotiations and employee stock options

Posted by Lauren S. CohenMar 04, 20140 Comments

In divorce negotiations involving property division, it is very important to carefully consider all of the different types of property a former couple has. Such careful consideration can be vital in ensuring that a fair division of property is reached.

There are a great many different types of property that can be subject to division in a divorce. One of the perhaps lesser-known types are unexercised employee stock options.

Such options are sometimes granted by companies to their workers. Stock options give workers the opportunity to purchase, at a set price, a certain number of shares in company stock at a future date. Depending on what the market price of the shares happens to be at the future date the option is exercised, such options can be worth a considerable amount or next to nothing.

This high degree of variability and uncertainty when it comes to what the ultimate value of unexercised employee stock options will be makes these options quite different from many of the other types of property a married couple can have. This variability/uncertainty can be very important to keep in mind when determining what to do with these options in a divorce-related property division.

As one can see, each different type of property can give rise to its own particular set of issues when it comes to division of property in a divorce. This is one of the many reasons why property division negotiations can get rather complicated. Given the potential high complexity of property division matters, having a knowledgeable attorney in one's corner during negotiations on such matters can be vital.

Source: The Wall Street Journal, “Splitting Up Stock Options in a Divorce,” Liz Moyer, Feb. 28, 2014