Divorce Stock Options

Divorce stock options is the topic for this blog. Stock options frequently vest over 3–5 years. This means that the options are vested one third in year one (each spouse would be vested one sixth), two thirds in year two (each spouse would be vested one third) and fully vested in year three (each spouse would be vested 50%).

If options will vest in the future after the divorce is final, you can receive payments from your spouse or make payments to your spouse post divorce. Options cannot typically be transferred to the spouse who is not an employee. Therefore, the employee spouse will be responsible for paying the taxes when the options are cashed. Keep this in mind as you calculate your net when options are cashed and avoid arguments post-divorce by understanding an addressing these issues during divorce negotiations.

It is important for those divorcing to speak with a financial professional who is versed in the financial issues of divorce. Most divorcing spouses are overwhelmed and not sure what to ask. By working with a certified divorce financial planner, you will educate yourself about foreign financial topics and get a financially smart divorce.