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Stock options, restricted stock units and divorce

On Behalf of | Aug 13, 2021 | Property Division |

Many working adults are compensated through perks like stock options and restricted stock units, or RSUs. These types of compensation can be an issue in divorces throughout Texas. Anyone going through a divorce should understand that just like a home or savings account, these are assets that should be divided when a marriage is dissolved.

Dividing stock options and RSUs

The division of these assets can be a little complicated. Stocks might change in value several times a day, so it’s necessary to decide when you want to divide these forms of compensation. Should you go by today’s value or agree to wait until a later date?

Another issue is the restricted nature of RSUs. With some accounts like a 401(k), employers divide the asset based on a court order. However, they won’t do that with an RSU, even during a divorce. One common way that this is addressed is to hold the stock units in a trust funded by one party and make their ex-spouse the beneficiary.

Sometimes, people are content with one party in the divorce writing a check for the estimated value of half of these assets. However, this can have tax consequences for the recipient. Using a vehicle such as a trust may be a better idea. All of these considerations may be discussed with a professional such as a Certified Divorce Financial Analyst. They may be able to help you understand what option is best for your situation.

Divorce is complicated, and the division of assets can be exasperating. By understanding what assets to pursue and how they may be divided, you may be able to prevent some frustration during your divorce.