Divorce can be challenging for any couple, but the process can be particularly complicated for millionaires. There are several assets to divide, so it’s important to understand the intricacies of your finances before dissolving your marriage. You likely have executive compensation if you are an Oregon couple going through a high-asset divorce. More than 15 million employees have restricted stock plans and options, and this number will likely increase in the near future.
Employers often offer stock options to employees as a reward for their hard work. The stock options give the employee the option of purchasing stock in the future based on the price of the stock on the day the stock was offered. However, restricted stock and stock options have vesting periods. This means that the employee can not trade the stock right away, and the waiting period can be between one and five years. It is important to know this during a high-asset divorce since the waiting period can dictate spousal support payments.
Restricted stock awards and units
Restricted stock awards and units are even more common than stock options. There are limits to these stock awards, including the fact that employees can’t sell the units immediately upon receipt. Employees who leave a job or are fired will no longer have rights to the stock. When the restricted stock vests, the whole value is taxable at standard income rates for high income.
Losing the value of stock
There are vesting periods connected to both stock options and restricted stock. This means that the stock can not be exercised until they vest. Employees could be leaving large amounts of money on the table if they disassociate from the company before the vesting period is over. The vesting schedule can also affect what one spouse can claim as marital property during a high-asset divorce.
Speak with a qualified lawyer to receive accurate information concerning what each spouse is entitled to in a divorce. Legal representation during this challenging time could make divorce proceedings more efficient.