California community property rules basically state that any assets acquired during a marriage should be split evenly between the divorcing parties, with some exceptions. However, it is often in both parties’ best interests to work out some sort of settlement whereby one spouse gives the other certain assets in order to keep other assets entirely to himself or herself. This can not only alleviate a court battle, but it also prevents delays in the marital dissolution process.
At Scott & Matteson Family Law, Certified Family Law Specialist, we are highly experienced in both the litigation and mediation of complex and high-asset divorce disputes. For the past 30 years, our Board-Certified Family Law Specialist has been handling division of assets cases involving:
The American economy is filled with jobs and employees who have stock options with a company as part of his or her overall benefits and potential compensation package. When two people decide that they want to end their marriage, the process of dividing the marital estate equitably and within the community property rules of California can become very difficult in regards to placing a value on these stock options.
Basically, community property rules state that any assets acquired during a marriage should be split evenly with some exceptions, but the problem that arises is that stock options, particularly those that have not vested, are extremely difficult to quantify in terms of value. Even if certain portions of a stock option plan have vested, there is no guarantee that the current value of the stock will remain consistent.
In California, there are generally two equations that exist within customary accounting rules that can be used to place value on a stock option plan. Judges have a wide range of discretion when it comes to which equation to use, and there are several factors that are considered when analyzing this largely intangible asset, including:
There are other variables, but the court can all but force the sale of the vested portion of stock options where it’s possible in order to satisfy at least part of the division of property that’s going to be owed to the other spouse.
However, there are alternatives to incurring the cost and the risks of a battle ensuing over just what the value is of this stock option plan. Many times, the parties will work out some sort of settlement whereby one spouse gives the other some form of asset or assets in order to keep the entire stock option plan for him or herself. This can help alleviate not only a battle, but also time delays in finishing the dissolution of the marriage and the costs involved with battling this out in court.
If you are facing a divorce where a stock option plan is or could be part of the marital estate, you need the help of Scott & Matteson Family Law, experienced in the complexities of division of assets. Contact us today for a free consultation at (858) 974-4900.
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