In very general terms, a stock option is a right that a corporation gives to an employee to purchase a certain number of shares of corporate stock for a set price during a specific period of time. Corporations often offer their employees stock options to give them special incentives to remain with a company, to attract employees to a company at a salary that is somewhat less than market rate, or to act as sort of a bonus for an existing employee. Employees are not required to ever exercise stock options, but certainly can do so.
Uncertainty as to current and future value can make the division of stock options as marital property very difficult. As a result, stock options are often hotly contested assets during a Georgia divorce. The spouse who owns the stock options is likely to argue that the assets are not worth much, due to the uncertainty of a prosperous company in the future. The other spouse, however, is likely to place a much larger value on the stock options in the context of divorce proceedings. The division of stock options also is dependent upon the type of stock options involved.
For example, a restricted stock option is granted at no cost to the employee, but the employee may not be able to exercise or transfer the stock option if and until certain conditions are met, such as the employee remaining employed by the company for a certain period of time. Stock options also may be “qualified” or “unqualified,” which is a status that directly affects the tax consequences of exercising or transferring the options.
As these examples illustrate, stock options and their division during divorce, including their tax treatment, can be extremely complex. As a result, professional guidance is absolutely necessary when a divorce involves these issues. Shaw Law Firm LLC has handled countless legal proceedings involving all aspects of family law, including the division of marital property. We have the knowledge and understanding of the aspects of family law that are necessary to effectively handle these types of cases on behalf of our clients.
Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.
Scott Shaw is founder and principle of Shaw Law Firm LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.