Carton & Rosoff PC-Attorney at Law

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The complexities of dividing stock options in a divorce

People have many different types of jobs in New York. While most people are paid for the work they perform, how they get paid and how much they earn can vary. Some are hourly employees and are paid based on the hours they actually work. Others receive salaries and are paid a certain amount regardless of how many hours they actually work. However, in addition to base pay, people may also receive benefits, bonuses and other forms of extra compensation for their work.

One of these other forms of compensation is stock options. These are given to employees so they can benefit if the company does well. However, sometimes these stocks do not vest right away. They also can be given for past work or as an incentive to stay with the company in the future. Even though the person may have not actually been paid for the stocks, they can still be considered their property and therefore in a high asset divorce they may be divided as marital property.

However, the amount of the stock that will be considered marital property depends on the reason the stock was given to the employee. If the stock was given for past services, the marital portion of the value is determined by dividing the number of months between the beginning of the marriage and the date the stock was granted to the employee and the number of months between the start of employment to the date of the stock grant. If the stock was incentive for future services, then it is the number of months between the date of the grant to the date the divorce commenced divided by the number of months from the date of the grant to the date that the stocks will vest.

There are many people who have stock options in their company. These stocks are given for various reasons, but any portion of the stock that was actually earned during the marriage must be divided. Determining this amount can be complicated though. Experienced attorneys understand how to determine these values and may be able to guide one through the process.

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