Site icon Jane Probst Law Offices S.C.

Dividing Restricted Stock & Stock Options in a Divorce

Bankruptcy and divorce

Restricted stock refers to company shares that are granted to an employee at no cost, but cannot be transferred or cashed in until certain conditions are met such as a defined period of employment or when financial benchmarks are met.

Stock options are offered to an employee to purchase company stock at a set price, at a future date. As the company grows, ideally company stock will go up and the opportunity to purchase stock at a discounted price will result in a tidy profit when the employee sells his or her shares.

Companies – think startups – short on funds, but long on potential sometimes compensate employees in part by offering them restricted stock or stock options. Although, early on, an employee may have to get by on less in terms of salary or benefits, restricted stock or stock options can lead to big payoffs if the company does well.

Restricted Stock & Stock Options in a Divorce

Assets such as restricted stock or stock options are part of many corporate compensation packages and are routinely subject to division in a divorce. However, they are among the assets that can be overlooked especially if your spouse is inclined to hide assets. Until the stock options and restricted stock are exercised (vested and transferable) they will not show up on tax returns, W-2s or other documents so they can sometimes remain hidden.

If you believe your spouse may have employment benefits you are not aware of, you will have to enlist the help of an attorney to uncover any stock options or restricted stock to be divided in your divorce. Even if stock options or restricted stock is not vested at the time of your divorce, if it is marital property, it is likely subject to division.

The attorneys of Probst Law Offices have litigated or settled hundreds of divorces where one spouse wants to stay in the family home, or keep the family business, or the keep the cabin and where there are also pensions, stocks and other retirement assets that need to be looked at. Call (414) 210-3135 or send an email for a free initial consultation with experienced Wisconsin divorce and stock division attorney today.

Exit mobile version