Not all assets are created equal when it comes time to divide them. Given the varied purposes for which stock options are granted and the wide range of values to which they are subject, asset division involving stock options can be particularly tricky. If either you or your ex-spouse has stock options and you’re unsure what will happen to them in a divorce, you should consult with an attorney. Check out this website to know more.
A good divorce lawyer can help you go through the difficult process with as little stress as possible.
Motivations for Granting Stock Options
As a first step, you should investigate the company’s intentions when granting the employee’s or partner’s stock option grant. Actually, this is a crucial step in determining whether or not the stocks themselves will be distributed in the divorce.
Stock options are a form of employee loyalty compensation used by some companies to retain valuable staff members. This is typically considered as payment in exchange for continued labour. Stock options are a form of compensation sometimes offered to employees as a reward for their dedication to the company. The stock grants are being awarded as a form of back pay for previous efforts.
Offering stock options as a form of compensation for low wages is a third alternative. Many new businesses are in this position because they lack the capital to pay their staff and partners fairly. The stocks are a form of current pay for the employee’s efforts.
The Mechanics of Stock Options in Alabama
In the state of Alabama, property is divided fairly. In other words, the assets are split fairly, but not necessarily equally. Any stock options that either spouse has the right to execute up until the marriage’s end are often considered marital property in states with equitable division. Options that can’t be used during that window are usually treated as personal possessions.
What kind of payment it is, etc., also plays a role. Stock options are likely to be regarded marital property if they provide pay for work performed at any time during the marriage, including before and after the wedding.
Stock Market Appraisal
In the event that the stock options are determined to be marital property, you will need to determine not only whether or not they are divisible, but also their value.
