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Equitable distribution of stock options: Not as easy as you think

On Behalf of | Mar 21, 2014 | Property Division

When many Florida couples start the divorce process, they may think of property division as relating to actual items. Although your personal jewelry and artwork may be important considerations, intangible assets can also play a critical role in your divorce. In some financially complex divorce cases, it can be difficult to divide or even identify potential assets. Stock options and restricted stock definitely fall into the “confusing property” category during equitable distribution negotiations. Today, we explain more about the potential value of stock options and restricted stock.

Stock options provide employees with the right to purchase company stock at a certain price up to a future date. In most cases, the price will be much lower than the current value. The employee can thus sell off their stock quickly, achieving a tidy profit. Restricted stock, on the other hand, consists of shares that are given to employees at no cost, but they cannot be easily transferred.

If stock options are being considered as part of your complex property division, it is best to take a few steps to protect your financial interests. The options and restricted stock should be carefully examined to determine their true value. In some cases, it can be difficult to hash out the exact value of a stock option, particularly for new companies. A divorce team may come in handy during this step of the process, especially those that include a financial expert such as a forensic accountant.

Divorce financial planners can also help determine how the stock options should be provided. A Florida attorney and financial planner may work together to identify assets and ensure that clients are not left in the dark about property to which they are entitled. Clients who are facing a complex property division situation with stock options or restricted stock may benefit from consulting a divorce attorney.

Source: Forbes, “Dividing Stock Options And Restricted Stock In Divorce” Jeff Landers, Mar. 19, 2014