Dividing Stock Options And Restricted Shares In A Fort Lauderdale Divorce

Equity compensation can be the biggest line item in a divorce, and the easiest to misunderstand. If you or your spouse earns stock options or RSUs, guessing your way through property division can leave money on the table. Our experienced Fort Lauderdale divorce attorney explains how Florida courts look at equity and steps to protect your share.

Equitable Division In Fort Lauderdale Divorce: How Florida Courts Treat Options and RSUs

Under the Florida Statutes, marital property and assets in a Fort Lauderdale divorce are divided equitably, not evenly. Stock options and restricted shares can be tricky because they may be partly earned during the marriage and partly separate. Key factors courts consider:

• Grant timing and vesting: Anything earned while you were married is usually considered marital property. If the stock was granted before marriage or won’t vest until after, courts use formulas (called “time rules”) to decide what part is marital.
• Grant purpose: If the award was payment for work done during the marriage, it’s more likely to be divided. If meant to keep your spouse at the company after separation, it may be separate.
• Type of equity: There are different kinds of stock compensation, such as incentive stock options (ISOs), non-qualified stock options (NSOs), restricted stock units (RSUs), and performance stock units (PSUs). Each comes with its own rules for taxes and transfers.
• Plan restrictions: Many company plans don’t allow stock transfers. In those cases, courts may order a payout when the stock vests or use a cash payment to balance things out.
• Valuation and taxes: Courts consider whether the stock is vested and at tax impacts, so neither spouse ends up with an unexpected bill.

Steps to Protect Your Share

Dealing with stock options or restricted shares during a Fort Lauderdale divorce isn’t something to guess at. Take these steps to avoid walking away with less than you deserve:

• Get copies of grant letters, vesting schedules, plan summaries, and account statements.
• Make a chart of grant dates, vesting dates, and any performance goals.
• Ask an accountant or financial expert to estimate the value now and at vesting, including taxes.
• Sometimes, stock can’t be split. Courts may order a deferred distribution or a current cash offset.
• Many companies forbid transferring stock. In that case, one spouse may keep the stock while paying the other their share in cash when it vests.

By organizing your evidence and knowing how the stock plan works, you and your lawyer can make a stronger case in court or negotiations.

Contact Our Experienced Fort Lauderdale Divorce Attorney Today

If stock options or restricted shares are part of your divorce, the details matter. At The Law Office of Sandra Bonfiglio, we gather the proper records, consult with financial experts, and build terms that take into account company rules, vesting schedules, and taxes.

Don’t risk leaving money on the table. Contact us today and request a consultation with our experienced Fort Lauderdale divorce attorney to discuss a strategy for protecting your share of equity compensation and other assets.

Sources:

flsenate.gov/Laws/Statutes/2018/61.075

nceo.org/what-is-employee-ownership/stock-options-restricted-phantom-sars-espps