One of the most complicated steps in any divorce proceeding is the division of assets. When dividing assets, the question of stock options may come up. You may wonder, "how are stock options from employers divided in a divorce?"
As Virginia's experienced family law firm, our legal team at DiPietro Law Group is here to answer your questions.
Stock Options and Divorce in Virginia
Over the years, stock options and restricted stock units (RSUs) from employers have grown in popularity. A stock option is the right to purchase stock in a company at a specified price.
While some stock options may be fully vested, meaning employees have the right to use the stock options as soon as they receive them, most qualified stock options come with a vesting period. If you have unvested stock options, how will these be divided in a divorce?
To better understand how your stock options may be divided, let's look at a few relevant Virginia cases that tackle this topic.
Dietz v. Dietz: 2003 Virginia Divorce Case
Dietz v. Dietz is the earliest stock options case in Virginia. This case dealt with Mr. Dietz's stock options—which he received before he separated from his wife. These options are vested both before and after the date of separation.
The trial court's ruling determined that Mr. Dietz's stock options were "deferred compensation." As a result, the court ordered Mr. Dietz to pay Mrs. Dietz a percentage of the stock option's net proceeds when he exercised his stock options.
Schuman v. Schuman: 2011 Virginia Divorce Case
In this case, Mrs. Schuman's employer provided her with stock options subject to a vesting schedule. The stock options granted did not fully vest until after Mr. and Mrs. Schuman separated. The Court of Appeals ruled that the stock options were separate property and belonged entirely to Mrs. Schuman.
The Supreme Court of Virginia later reversed this ruling, stating that the stock options were "deferred compensation," whether or not they were vested.
How Stock Options May Impact Your Divorce in Virginia
Virginia is an equitable distribution state when it comes to divorce. One spouse's stock options are not automatically divided 50/50 between spouses in the case of a divorce. Instead, a family court or divorce settlement decides how to distribute stock options between spouses.
To answer the question "how are stock options from employers divided in a divorce," consider the following:
- Were your stock options fully vested, or were they subject to a vesting period?
- When did the vesting period come into effect?
For help handling your vested or unvested stock options in your divorce, contact the experienced lawyers at DiPietro Law Group.
Contact Our Reliable Virginia Family Law Attorneys
If you're not sure about the division of stock options in your divorce, contact our experienced divorce lawyers at DiPietro Law Group. We have served the state of Virginia for decades, providing honest, caring legal aid to clients.
If you have more questions beyond "how are stock options from employers divided in a divorce," contact our Virginia family lawyers online or call (888) 530-4374 to schedule a consultation.