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Property division in a divorce: stock options

April 13, 2017

It can be hard enough for divorcing Connecticut couples to split up the more common assets, such as family vehicles, a house and cash. But add company stock and similar investments and the situation can get quite messy. By their nature, stocks can be difficult to divide in a divorce.

Sometimes stock investments can be worth lots of money. For couples where stocks make up a significant portion of their wealth, they can be highly sought-after assets. Unfortunately, many spouses may not know if their husband or wife has any sort of stock options, and some spouses may not be quick to disclose them during divorce settlement negotiations. Therefore, if there is a chance that the other spouse could have stock options or restricted stock through an employer, it could to be pursued by an attorney, who can subpoena the company’s human resources department. But if the couple is attempting mediation, there is no such option to subpoena records, so that is something to consider when deciding whether or not mediation is a good option.

The true value of stock can be challenging to determine. With market prices going up and down daily, there are no guarantees. Plus, sometimes even when stock is granted to an employee, the stock may not yet be vested in the employee. A person may need to be with a company for three to five years before receiving being vested. Until then, the stock is virtually worthless and if the couple divorces before the spouse is vested, it may not be split in a divorce. This law varies from state to state.

In a divorce, full disclosure is necessary in order to ensure fair property division but couples should be aware that these types of stock options are easy to hide. Both parties should be fully aware of the assets and liabilities within a marriage so each party can get their fair share in a divorce.

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