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Stock Options and Employee Benefits

Be careful and be thorough in reviewing any stock options or employee benefits of any kind before settling any divorce action. 

In Virginia, any asset acquired during the marriage, whether it’s vested or non-vested, is a potential marital asset.  Oftentimes, companies issue stock options that vest over a period of time.  At first glance, it may appear that they have no value or very little value.  Even though they are not vested, courts in Virginia have the authority to enter orders giving a percentage of those non-vested benefits to the spouse when they do vest.  For example, if a stock option gives the employee the right to purchase a stock at $10 and the stock is trading at $9, it appears to have no value.  However, if the stock option is valid for the next five years, and the stock goes up to $20 a share within that time period, then certainly those options do have value.  Any settlement agreement or court order needs to address those types of vested and non-vested stock options.

If in doubt, the safest procedure is to subpoena the records of the employer to get all financial information concerning stock options and any other employee benefits directly from the source.  

© 2021 Odin, Feldman & Pittleman, P.C.National Law Review, Volume IV, Number 69
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About this Author

J. Patrick McConnell, Odin Feldman Law Firm, Family Law Attorney
Shareholder

With more than 30 years of experience in Family & Domestic Relations law, Patrick McConnell represents clients who have particularly complicated matters that cross state or international boundaries, or that involve complex financial issues. His background in finance and knowledge of tax law provide insight that can lead to innovative solutions. When necessary, Patrick teams with an attorney from the firm’s Estate Planning or Corporate practice areas to assist with the preservation of wealth for his clients' children or their future generations.

Patrick is chair of the Family...

703-218-2185
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