How Fort Lauderdale Courts Divide Stock Options And RSUs In A Divorce

If your compensation package includes stock options or restricted stock units, you already know they can represent a large share of your household’s wealth. So what happens to that equity when a marriage ends? It’s a question we hear often, and the answer is rarely simple.

Why Equity Compensation Complicates Property Division

Unlike a checking account or a car, stock options and RSUs don’t always have a clean, present-day value. Some have already vested and can be sold. Others won’t vest for years and depend on the employee staying with the company. Add in the fact that some of these grants were awarded before the marriage, during the marriage, or partly for future work, and you can see why this becomes one of the more contested issues in a divorce involving equity compensation.

Florida is an equitable distribution state, meaning marital assets are divided fairly, though not necessarily in half. Under Fla. Stat. § 61.075, both vested and non-vested benefits earned during the marriage may be treated as marital property subject to distribution, even if the stock hasn’t been exercised yet. That includes employer-granted stock options and RSUs.

How Courts Decide What Counts as Marital Property

A judge generally has to ask when the equity was granted and why. Was it compensation for work already performed, or an incentive tied to future performance? The grant date often plays a bigger role than the vesting date in determining whether the asset is marital.

When an award is only partly earned during the marriage, courts may apply a formula sometimes called a coverture fraction or time rule. This approach compares the length of the marriage during the vesting period to the total vesting period, helping separate the marital portion from the non-marital portion. Courts may also consider:

• Whether the stock or RSUs were granted before, during, or after the marriage
• Whether the award depends on continued employment
• The tax consequences tied to exercising or selling the shares
• Whether a marketability discount applies due to limited liquidity

Because these calculations involve financial projections and sometimes expert testimony, valuing this type of compensation is rarely a do-it-yourself task.

What This Means If You or Your Spouse Hold Equity Compensation

If stock options or RSUs are part of your financial picture, it’s worth asking yourself a few questions early on. When were these grants issued? Are any of them tied to performance goals you haven’t met yet? Have you tracked the vesting schedule? Getting organized with these details before negotiations begin can make the process far less stressful.

Every compensation package looks a little different, and every marriage has its own timeline of grants, raises, and promotions. That’s exactly why these cases often require a closer look at the specific facts rather than a generic formula.

Talk to a Fort Lauderdale Family Law Attorney About Your Equity Compensation

Dividing stock options and RSUs in a divorce involves financial nuance that goes well beyond a simple asset list. If you’re a Fort Lauderdale resident navigating a divorce that includes equity compensation, working with experienced Fort Lauderdale divorce attorneys can help you understand how these assets may be treated. At the office of Sandra Bonfiglio, P.A., we help clients throughout Fort Lauderdale and Broward County address complex compensation issues as part of their divorce. Contact us today to schedule a consultation and discuss your situation.

Source:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099%2F0061%2FSections%2F0061.075.html