COVID-19, stock options and divorce are making lives more complex. In addition, they are interrelated in the following way:
During the COVID-19 crisis, people have been shuttered at home or at least more isolated spending time with family. Finances may be tight and emotions are strained. As couples experience greater stress, stress is leading to marriage breakdowns and decisions to divorce.
The pandemic has been difficult for companies in general. Many companies that are strapped for cash are offering stock options or restricted stocks instead of bonuses. Such stocks act as incentives to attract new talent and are a means of holding onto existing employees.
Discovering whether a spouse has stock options or restricted stocks can be challenging during divorce. It is often not a straightforward aspect of property division. For one thing, a spouse may not be aware that stock options or restricted stock are part of the other spouse’s compensation. A Kiplinger article points out that unless a restricted stock is vested that year or the spouse exercises options, they will not appear on tax returns, a W2 or other financial statements.
What If Your Spouse Always Handled the Family’s Financial Details?
If you’re seeking divorce and your spouse has always handled the finances, you may not be aware of the details. Perhaps you don’t know how stock options or restricted stocks work.
A stock option is a right the employer gives to the employee to buy company stock at a particular price at a future date. Restricted stocks are similar. They are company shares that an employer issues to employees as additional compensation. Often employees receive options or restricted stocks on a yearly basis. For example, a vesting schedule may issue 1,000 options or stock shares to certain employees at the end of a year. This compensation method motivates employees to work hard, stay with the company and help the company succeed.
Legal Help during COVID-19 with Stock Options and Divorce
An experienced family law attorney can help you find out whether your spouse has stock options or restricted stock. The lawyer can ask your spouse to authorize the employer to provide his/her stock options or restricted stock information. In the event that your spouse is unwilling to authorize an information release, your attorney may have to subpoena the employer for the information.
At Pfister Family Law, our lawyers can help you navigate the complexities of divorce. We are glad to answer any questions you have, offer legal advice and take legal action on your behalf.