Dividing Stock Options in Equitable Distribution Cases

North Carolina divorce proceedings are in place to help divorcing spouses end their marriage in a way that is legally fair to everyone involved. When two spouses file for a divorce, Wake County family court can divide up the assets of both spouses and arrange for an equitable distribution to both parties. This allows for each spouse to receive the appropriate amount of property and assets and also for each spouse to receive them in a fair amount of time. Certain property and assets may be quite complex to split equitably. One example of this is the process of dividing stock options. Each scenario is different, and spouses should consult with NC family law attorneys to guide this process fairly.

North Carolina family court views property and assets received or attained by each spouse during the marriage as “marital property” and therefore will split it equitably between both spouses. Stock options present an interesting challenge, as stock options may be argued to not have any value until a particular date. How do stock options work? An employer compensates one spouse by allowing them a choice of whether or not to purchase or sell a specified amount of discounted stock at a particular price point within a certain time period. If this time period falls after the separation of the spouses, the stock option may or may not be considered a “marital property.”

Wake County attorneys will work with separating spouses to best determine how to equitably split the asset of a stock option. Many other factors may be considered when looking at the value of a stock option. For example, some stock options can only be used if a spouse continues to stay with the company. If this period of time falls after the spouses separate, it is even more complicated to determine the actual value of the stock option. In addition, taxes on the value or the perceived value of the stock options will need to be considered by the court and the separating spouses.

Dividing stock options in equitable distribution cases is incredibly complex. The value of the stock options as marital property can be seen in a number of different ways, depending on which spouse is looking at the value. It is also challenging to determine the fairest way to split the spouses’ assets. When spouses separate, use of NC family law attorneys will help each spouse to receive a fair and equitable amount of all their assets, including stock options.