Are stock options considered assets to be divided during divorce?
The first thing we need to look at is what is a stock option? A stock option is the right to buy stock in a company who employs the spouse at a discounted or fixed price within a certain period of time. Stock options can be valuable and they’re subject to equitable distribution as a marital asset. The issue that you’re asking is how to distribute them as the stock has not yet been purchased and the right is not transferred to the non employee. The options are distributed by something called a Callahan Trust, which is a constructive trust and the non-employee receives his or her percentage of the shares when the options vest.
New Jersey attorney Cynthia Ann Brassington is certified by the Supreme Court of New Jersey as a Matrimonial Law Attorney, and regularly helps people to resolve their divorce-related issues, from property division to child support, and custody. To learn more about Cynthia and her practice visit www.LinwoodFamilyLaw.com.