Going through a divorce can be a difficult and emotional time, but it’s important to take care of yourself and your finances during this process. One thing that you may need to consider is your spouse’s executive stock compensation. Here are some things to keep in mind:
- Understand what executive stock compensation is: Executive stock compensation is a form of payment that is given to top executives in a company. It can come in the form of stock options, restricted stock units, or other types of equity-based compensation. These types of compensation can be very valuable, and they may be subject to division in a divorce.
- Determine if the compensation is marital property: In most states, property that is acquired during a marriage is considered marital property and is subject to division in a divorce – even if paid out after the divorce is final. This includes executive stock compensation that was earned during the marriage. However, if the compensation was earned or accrued before the marriage or after divorce, that portion may be considered separate property and not subject to division.
- Get a valuation of the compensation: In order to divide executive stock compensation, you will need to know its value. This can be difficult to determine, as the value of stock options and other equity-based compensation can fluctuate. You may need to hire a financial expert to help you determine the value of the compensation. There is a formula per the Texas Family Code which a financial expert will utilize to determine the value and the portion which is marital property and the portion which is separate property.
- Consider tax implications: When dividing executive stock compensation, it’s important to consider the tax implications. Depending on how the compensation is divided, there may be tax consequences for both you and your spouse. You may need to consult with a tax professional or divorce financial expert to determine the best way to divide the compensation.
- Negotiate a settlement: Once you have determined the value of the executive stock compensation and considered the tax implications, you will need to negotiate a settlement with your spouse. This can be a complex process, and you ideally, will work with a divorce attorney to ensure that your rights are protected.
Remember, going through a divorce can be a difficult and emotional time, but it’s important to take care of yourself and your finances. By understanding executive stock compensation and taking the necessary steps to divide it, you can ensure that you receive a fair settlement in your divorce.
