When couples decide to part ways, the division of assets becomes a central concern.
For individuals with stock options, the fate of these investments is a key aspect of divorce.
Status of stock options
In Massachusetts, stock options acquired during the marriage are generally marital property. This means that they may be subject to division during divorce proceedings. However, the court takes several factors into account before making a decision.
Vesting period matters
One key factor is the vesting period of the stock options. If the options have not yet been vested, they may not be immediately divided. The court might choose to defer the division until the options become exercisable.
Valuation of stock options
Determining the value of stock options is another step. Courts often consider the market value at the time of divorce. The spouse holding the options might need to provide accurate and up-to-date information for a fair assessment.
Equitable distribution principle
Massachusetts follows the principle of equitable distribution, meaning that the court aims to divide assets fairly, though not necessarily equally. It considers the contribution of each spouse to the acquisition of assets, including stock options.
Future earnings potential
The court may also take into account the future earnings potential associated with the stock options. If one spouse has a higher earning capacity due to these investments, the court might adjust other aspects of the division to achieve a balanced outcome.
Although complicated, divorce is the best solution for many couples. In 2021, the U.S. had 689,308 divorces. When dividing assets, being transparent about financial matters can contribute to a smoother resolution of this aspect of the divorce proceedings.
