Can Restricted Stock Units be Divided in a New York Divorce?

Can Restricted Stock Units be Divided in a New York Divorce?

There are some companies that choose to compensate their employers in ways that exceed their normal salary. Sometimes, compensation packages can include forms of payment that encourage good performance overtime. This can include restricted stock units (RSUs). If a person has RSUs and is going through a divorce, they may question whether or not it is subject to equitable distribution. Continue reading below to learn how this is done and contact an experienced New York divorce attorney for assistance with your case.

How are RSUs Divided in a Divorce?

The state of New York is an equitable distribution state. This means marital assets are divided based on what is fair and just. In New York, stock options and RSUs acquired throughout the duration of a marriage are considered to be marital property. It is because of this that they can be divided in a divorce. This is unless the holder can prove they were acquired as a gift or inheritance, or in exchange for other non-marital property. It can be determined if a stock option was granted as a reward for past services by examining the plan documents. This can include the Stock Options Plan and the Options Statement. These documents should include exercise price, expiration date, and other terms that may pertain to a divorce. 

When it comes to valuing a stock option, it depends on whether or not it is publicly traded or privately held. If the stock is publicly traded, the value is based on the fair market value of the stock at the date of trial or the date of the legal action. Stock of a privately held company can be more difficult and usually requires business valuation.

How Can I Protect my RSUs?

Individuals who have certain stock options and are facing these situations should be sure to try and protect their assets. This can be done with the assistance of an effective divorce attorney to provide them with guidance during this time. This includes informing them of the proper documentation to have prepared, such as:

  • Testimony of you and your employer
  • A copy of your stock plan
  • Correspondence and additional documentation related to the stock award
  • Vesting schedule
  • Stock plan statements

Contact our Firm

The Law Office of Peter L. Jameson, PLLC understands the harsh implications of relocation can have on a child and his or her parents. When you have a contested relocation matter, it is important to have an experienced attorney to represent you in court. If you are faced with a relocation matter in Rockland County, contact The Law Office of Peter L. Jameson, PLLC today to schedule a consultation.