Stock Options and Restricted Stock for Your Divorce

Attorney with client

Stock options and restricted share units (RSU), particularly if a spousal is a high-level employee of an enterprise, are assets that many couples share in their works. Due to differences in personality and value, these assets can be difficult to split. Ask your family attorney in Oklahoma City, OK, for detailed guidance. Here is a basic of the entire concept.

In simple terms, stock options grant an employee the right to purchase business inventory at the future cost. The concept is that this fixed price is much less than future trade prices so that the worker can then sell his cheaply bought inventory for a considerable profit.

Restricted stock refers to company shares which, but which are not transferable without charge to the employees unless certain conditions such as the company's employment have been fulfilled for a specified period.

Transferability of the Two

Certain plans allow for the transfer of assets to the employee's former spouse, but most do not. Seeing stock options transferable is very uncommon. They may lose their status as and fall under applicable tax laws if they are moved. Not transferable are restricted stocks.

The worker maintains stocks on behalf of the non-transferable inventory or shares of alternatives and exercises them on behalf of the non-employee or transfers the shares published. To ensure that the non-employee spouse is taxed by his / her rates, IRS is appropriate for the allotment of the tax.

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Stock Options and Restricted Stock’s Valuation

Instead of dividing stocks, it is uncommon to value the alternatives. Because the value is continually changing, it is at best inaccurate. The following factors include the Black Scholes formula in the variables of a complicated formula used to evaluate stock options, to value the alternatives properly:

  • Grant price

  • Date of expiration

  • Grant date

  • The volatility of the stock price

  • Current stock price

  • Vesting schedule

The valuation of alternatives is sometimes the only way to divide assets by offsetting another asset. The division of shares, however, separates risks and rewards for both spouses. Where feasible, we think it is preferable.

For Getting Fair Share

To work through every aspect that is necessary to determine what is "reasonable," you will need a skilled financial planner for divorce and an experienced family attorney in Oklahoma City, OK, to ensure your solution involves it. You will want to ensure that your portfolio includes assets which are likely to be at least as appreciated, without any worse tax effects when you do not obtain a share in inventory options / restricted stock.

If you are heading to divorce and you have questions about splitting financial assets, the process can be managed better with a family attorney at Handley Law in Oklahoma City, OK.

** Disclaimer: This blog article is not legal advice and does not create an attorney-client relationship.