Compensation packages for employees in large companies do not always look the same. Sometimes, they can include additional compensation measures that encourage good performance overtime. In some companies, this can include restricted stock units (RSUs). Individuals who have RSUs and are going through a divorce may be wondering if this asset is subject to equitable distribution, even if it has not vested yet. Continue reading below to learn more and contact an experienced New York divorce attorney for assistance with your case.
How are RSUs Divided in a Divorce?
New York is an equitable distribution state, meaning that marital assets are divided in a divorce based on what is fair. Stock options and RSUs acquired throughout the duration of a marriage in New York are considered marital property and can be divided in a divorce. The only exception is if the holder can prove they were acquired as a gift or inheritance, or they exchange it for other non-marital property. It can be determined if a stock option was granted as a reward for past services by examining the plan documents, such as the Stock Options Plan and the Options Statement. These should state exercise price, expiration date, and other relevant terms.
When determining the value of a stock option, it depends on if it is publicly traded or from a privately held company. The value of publicly traded stock is based on the fair market value of the stock, usually at the date of trial or the date of the legal action. Stock of a privately held company can be more complex and tends to require business valuation.
How Can I Protect my RSUs?
When dealing with stock options in a divorce, it is important to protect the assets that you can. That is why it is beneficial to retain the services of a knowledgeable attorney who can guide you through the process and prepare you with the right documentation, such as:
- Testimony of you and your employer
- A copy of your stock plan
- Correspondence and additional documentation related to the stock award
- Vesting schedule
- Stock plan statements
Contact our Firm
Matters of divorce and family law should be navigated with the guidance of an experienced attorney. If you need strong legal representation regarding matters of divorce, family law, and estate law, contact the Law Offices of Susan A. Kassel, P.C. to schedule a consultation today.
