When divorcing, you will encounter different obstacles and challenges to determine the terms that will apply to the termination of your marriage, like child custody, child support, spousal support, and property division. The division of assets is one of the most contentious issues couples face, as certain assets pose more of a challenge to split due to their value. While some marital assets can be divided easily, investments and stock can be more complicated. If you are worried about how your investments and stocks will be divided during your divorce, it is in your best interest to contact an adept Rockland County Property Distribution Attorney who can help you navigate this complex process.
How do you divide investments and stocks during property distribution in New York?
In New York, any assets acquired during the marriage are considered marital property and subject to equitable distribution. Equitable distribution states divide marital property fairly between a divorcing couple. However, that does not necessarily mean an even 50/50 split. Depending on whether there are any mitigating factors, the court may grant a larger share of the couple’s marital assets to one spouse. Ultimately, the court has the authority to deem what a fair distribution of property looks like for a couple. That said, if you acquired your investments or stocks before your marriage or after you legally separated, these assets will be considered separate property and, therefore, not subject to equitable distribution. If acquired during the marriage, these assets would be divided equitably between you and your spouse.
Retirement accounts accumulated during the marriage, such as 401 (k)s, IRAs, 403(b)s, and other retirement accounts, are usually invested in the stock market. Similarly, other assets considered your marital property may be invested into the stock market, such as investment accounts, trust accounts, and employer stock options. When this is the case, spouses can request a Qualified Domestic Relations Order (QDO) to help them obtain a portion of their former spouse’s finances without incurring tax penalties.
What should I know about dividing stock options?
Although it is difficult to divide various types of investments, dividing stock options is particularly difficult because they are a part of one spouse’s employment benefit in which the company they are employed by gives them the opportunity of buying company stock in the future at a discounted or stated fixed price. Essentially, this means they can purchase stock at a desirable price in the future and obtain astronomical wealth through options.
Since they are a source of wealth, the court may use the Hug or Nelson formula. With the Hugh formula, the stock options will be multiplied by the value of your stock by the years you have worked at the company. This number will be divided by two, and each party will receive half the funds. The Nelson formula divides the time you received the stocks and the date of your separation to when you were granted the stocks and when they were vested.
Dividing investments and stocks is challenging when distributing marital assets in a divorce. However, an experienced attorney from The Law Office of Peter L. Jameson, PLLC, can assist you in reaching a fair property division. Allow our firm to represent your interests to achieve the best possible outcome.