Many couples have a goal to build wealth together so they can live and retire comfortably. Some rely heavily on stocks and stock options as one of the components of their plan. Those assets that they counted on for comfort can become significant challenges if they decide to divorce.
Dividing investments can be complex during a divorce, particularly because New Jersey follows an equitable method of division. This means that assets are divided based on what’s considered fair instead of the focus being on what’s equal.
What makes stocks and stock options challenging?
Stocks and stock options are particularly challenging because how and when they were acquired plays a role in how they’re divided. Generally, stocks that are acquired during the marriage are considered marital property, even if only one person is a named owner.
Stock options are a bit more complicated because they’re usually tied to future performance and employment. Still, if they’re granted during the marriage, they are typically considered marital property even if they aren’t exercisable until later. There are exceptions to this, and that may mean that only partial stock options are viewed as marital property.
Valuating stocks is usually straightforward, but that’s not the case for the stock options. Vesting schedules and expiration dates are often considered, and tax consequences may also be factored into the division. These assets are often classified as present wealth, but they also have future value.
Determining how to divide property in New Jersey can be complex, particularly in high-value divorces. Working with someone familiar with these matters may be beneficial because they can assist you with exploring the options.
