Filing for divorce can be an overwhelming process. Not only is this an incredibly emotional process, but you’ll also need to navigate matters like child custody and alimony. However, one of the most complicated processes you may have not yet considered is the division of assets like stock options and RSUs. If you’re unsure how these assets are handled or why it’s recommended to connect with St. Louis property division lawyers, you’ll want to keep reading. The following blog explores what you should know about these difficult matters.
Are Stock Options and RSUs Considered Marital Property?
Missouri adheres to the equitable distribution method for dividing marital property. Essentially, this means that any asset obtained during the marriage, regardless of who the “owner” is, will be divided based on each party’s contribution to the marriage, rather than automatically dividing assets evenly. As such, stock options and RSUs can be deemed marital property if they were granted during the marriage. However, the court will need to examine a number of factors to determine if they are subject to distribution in your situation.
Generally, the most important factors the courts will examine are when a stock option or RSU was granted and what it is meant to reward. For example, if your spouse is granted an RSU for their performance at work during your marriage, the court will most likely count this as marital property.
The court will also consider whether or not the options have vested. Essentially, if they have vested but the employee hasn’t exercised them yet, they can be deemed marital property. In the event the options are unvested, it means they are dependent on continued employment with the company or an employee’s performance. As such, the court may be able to treat the portion of the option earned during the marriage as marital property, while leaving the other portion as separate property.
How Are These Assets Valued?
Determining the value of stock options and RSUs during a divorce can be incredibly difficult, as the value of stock options can fluctuate due to a number of factors, like the company’s stock price, the vesting schedule, and any tax consequences. RSUs, on the other hand, generally have no real value until they have vested.
One method the court may utilize to divide these assets is to use models that will predict the expected future value of these assets. Another option is to defer the division of these assets until they have fully vested, at which point they will be divided based on a court order.
The court may assign a percentage of each asset to the spouse, or award all stock-based assets to one party while granting their spouse assets of equal value. In some instances, the court may order the sale of these assets and divide the funds between the couple.
Dividing stock options and RSUs is often one of the most complex parts of the division of assets during a divorce, which is why working with an experienced attorney to help protect yourself is critical. At Stobie Family Law Group, our team understands how overwhelming these matters can be to navigate, which is why we will do everything possible to help you fight for the best outcome for your circumstances. When you need help, do not hesitate to contact our team today.
