What Will Happen to My Stock Options in My Divorce?

Stock QuoteCompanies are increasingly using restricted stock options and incentive stock options as methods through which to compensate their employees, due to the tax benefits of structuring compensation in unconventional ways.  In Massachusetts, stock options that have been granted, but have not yet vested (meaning that the value of which is not yet available to the employee) may be divided during the course of a divorce.

Similarly, options and stock units that have vested but have not yet been exercised may be divided, as well.

Having said options or stock units does not necessarily mean that they will be divided, though.  The recipient spouse may be able to prove that the granting of stock options or units were for future performance, and if he or she is able to prove that this was the case, and the future performance is to occur after the divorce, some of the stock might be removed from the division of assets.

If you have any questions about divorce in Massachusetts, contact Finn & Eaton, P.C. in Saugus, or call 781 484-1066 to schedule a free one-hour consultation.