Sep 08, 2023 | Divorce,  

How Are Stock Options Divided in Divorce in Georgia?


Life goes on after a divorce, even if it doesn’t always feel like it. While you might be making decisions about how to change your lifestyle now that you and your ex are supporting two households instead of one, you need to be conscious of your financial future and protecting your assets.

Stock options can be a tricky asset to divide in a divorce. Will you need to share some of them with your spouse, or are they yours completely? Learn more about stock options in a divorce below. If you have questions about your divorce or the divorce process in Georgia, contact our experienced divorce lawyers to discuss your situation. (770) 425-5573.

What Are Stock Options?

Stock options are assets that provide investors the right to buy or sell a stock at a set price and date. Just because they are available does not mean the stocks have to be purchased. Some companies use stock options as compensation for their employees.

Stock options can be given to employees or offered as an additional benefit for employees. There are a few varieties of stocks.

Types of Stock Options

The type of stock will determine whether they’ll be considered in a division of property or not. Two broad categories of stock include vested or unvested stock.

In basic terms, vested stocks are available for purchase immediately that anyone can own outright. They don’t have to be an employee, and it can be sold or transferred even if they leave the company.

Unvested stock options cannot be purchased until a later date; they are restricted or retained until the terms of the “vesting schedule” are met. These stock options are generally set aside for an employee. After a certain point, employees will take full ownership and the stock options will be “vested.” For instance, an employee might have to work at the company for a certain amount of time before they can purchase these stocks.

When Can Stock Options Be Considered Marital Property?

The time of purchase will play the biggest part in dividing property during a divorce. Under Georgia law, marital assets and debts are fairly divided in “equitable distribution.” That means there isn’t a guaranteed 50-50 split of property for each party.

Instead, the court will evaluate what each spouse contributed to the marriage and decide a fair split of the property. This process includes physical property, real estate, investments, and debt. Property is either labeled marital or separate.

Separate property typically remains with the person who bought or received it before the marriage. Things can be considered marital property when it’s been purchased or acquired during the marriage.

Dividing Vested or Unvested Stock Options

When distributing stock options, the court will consider when they became eligible for purchase, or if they were vested or unvested during the marriage.

Vested stock options can be marital property if they were bought or available during the marriage. Their value can usually be calculated fairly easily. Stocks bought before the marriage are usually considered separate property.

Unvested stock options can be more difficult to divide. They might remain separate property if they have not “matured” by the date the marriage ends. Sometimes, if one or both spouses used marital funds to invest in unvested stock options, those options can be marital property.

Calculating the value of stocks can be difficult. You will need to show how much stock you purchased or whether your spouse contributed to buying any of your stocks. The value will be included in the total amount of marital property divided.

What Happens if My Spouse Hides Their Stock Options?

Spouses need to disclose assets during a divorce. It’s not uncommon for people to try to conceal their finances in an attempt to keep more for themselves. There are many methods they could use to hide their assets: they could create separate bank accounts, underreport their income, use safe deposit boxes, or try to invest in stocks.

If your spouse tries to hide their stock options, they could be committing perjury. They could face fines or jail time. Their claim could also be dismissed. If you believe your spouse is not being truthful about their finances, be sure to let your attorney know. Gentry Law Firm attorneys work closely with forensic accountants and other professionals with experience in locating hidden funds and assets.

How Can a Marietta Divorce Attorney Help Me?

It’s in your best interest to work with an attorney to calculate your stock options’ worth and help track down any hidden assets. An experienced Georgia divorce lawyer will be able to guide you through the steps of your divorce, making sure you don’t miss anything.

They can help you distinguish between vested or unvested stock options, and if any of your stocks should be considered marital property. Your attorney should also be prepared to argue what an equitable division is and why you are entitled to that portion.

Call The Gentry Law Firm Now

If you have questions about your stock options in a divorce, you should call the Marietta family lawyers at Gentry Law Firm, LLC. Attorney William C. Gentry has been helping clients like you with their divorce and family law matters since 1986 with a focus on family law.

We understand that the divorce process can be daunting to approach alone. There are several steps to take, and you shouldn’t have to handle paperwork without assistance from someone with experience. We can help you determine your property’s value and we will work to protect your separate property and get you the portion of marital property you deserve.

Call (770) 425-5573 or use our online form to schedule your consultation.