Baltimore & Towson Lawyer Discusses Valuation of Unexercised Stock Options During Divorce in Maryland
Going through a divorce is often a difficult process. Quite often, the parties are not fully aware of the various aspects that must be considered when divorcing. Sure, they might think of issues that involve the children, and they may think of general property division issues, like who will get the car and the house. However, as your Baltimore and Towson divorce lawyer will tell you, divorcing parties also need to be mindful of their stock options and how they will be affected by the property division process.
The division of marital assets and property is a significant part of the divorce process that extends far beyond splitting up the home furnishings and the cash in the bank accounts. Some individuals have a number of investment accounts, such as 401(k) accounts and stock options. To be sure, unexercised stock options that are granted throughout the course of a marriage (or even right after the end of a marriage) can be problematic for both the divorcing individuals and the companies that are granting the options.
A Brief Overview of Stock Options
Generally speaking, stock options are contracts to buy a certain number of stocks within a certain period of time for a specific amount of money per share. Such options are granted to certain employees as additional compensation for prior job performance and current conscientiousness, as well as an incentive for continued loyalty and future work performance. Simply stated, stock options keep many employees happy, particularly if the company does not have enough money to compensate them appropriately, or they can be used as a way to ensure the employee's commitment (at least until the options vest).
Vested stock options, which are stock options that belong to the employee and are subject to forfeiture upon expiration only, are subject to distribution during a divorce and are typically easier to deal with during the divorce. However, as your Baltimore and Towson divorce lawyer will tell you, stock option values can be difficult to determine prior to their vesting or being exercised, which can make them hard to deal with during the divorce process.
Things to Consider When Dealing With Unexercised Stock Options
It is important for the nonemployee spouse to know his or her legal rights with respect to unexercised stock options. One thing that the spouse should do is to ensure that complete discovery of the employee spouse's employment assets is done, to include a thorough review of the employee spouse's stock purchase plan handbooks and summary documents. Additionally, the nonemployee spouse should look to obtain a copy of the other spouse's employment contracts, stock grants and letters/memos that discuss employee benefits and compensation.
Under Maryland law, the division of assets and property must be "fair and equitable." However, in order for that to occur, the parties must have a true and accurate picture of the value of all the property involved.
If you have questions or concerns about how unexercised stock options will affect your divorce, contact a Baltimore and Towson divorce lawyer at The Law Offices of Amar Weisman, LLC today.
Call (410) 321-4994 For a Free Consultation
Call The Law Offices of Amar S. Weisman at (410) 321-4994 to schedule a Free Consultation. The Purpose of the consultation is to determine whether you want to retain this law firm as your Baltimore County & Harford County Family Lawyer. If you do wish to proceed, then you must pay a retainer. See Our Policy on Fees and Costs. The family firm is located next to The Circuit Court for Baltimore County, at 1018 Dulaney Valley Road, Towson, MD 21204.