Divorce is a complex process, and a significant portion is figuring out which property belongs to which spouse. In Oklahoma, stock options can be an essential part of a couple’s assets, and understanding how the state looks at them and how they are treated during divorce is necessary for the parties’ financial stability.
What are stock options?
Stock options allow the employee of a company to purchase shares of their employer’s stock at a certain price during a specific timeframe.
They can be valuable, especially if the company stock appreciates over time. In divorce, the question of who these stock options belong to and whether they should be divided often arises.
In Oklahoma, any assets acquired during the marriage are marital property and subject to division during a divorce. Stock options can complicate matters if they were granted before marriage and vested after the divorce is final. However, if the employee spouse received them during the marriage, they are typically treated like any other property after everyone agrees on their worth.
Valuation of stock options
To divide stock options fairly, the parties have to agree (or the court has to determine) how much they are worth. This can be a challenging process because they are only valuable if they are exercised. The valuation process often involves reviewing the following:
- The current market value of the stock
- The exercise price
- The vesting schedule
Family law attorneys are familiar with these, and they can help you not only figure out the value but also get an idea of whether, in your case, the stock options are marital property or not.
Equitable distribution
Oklahoma follows equitable distribution laws, meaning the court divides marital property fairly but not equally. Not all states follow this doctrine, but it is advantageous in cases where one of the parties stays at home with the children, for example, and the other spouse is the primary breadwinner because instead of dividing everything evenly, the court will try to be fair.
When making determinations involving property division, the court considers:
- The length of the marriage
- Who contributed to the stock options
- The financial circumstances of each spouse
In some cases, stock options can be divided between the spouses and in others, they can be awarded to one of them. Sometimes, couples negotiate a settlement in which one party keeps the stock options in exchange for the other party taking another asset—for example, the family home.
Dividing stock options in a divorce can be complicated and not always straightforward, so consulting with and retaining a family law attorney is critical to ensure your interests are protected and that you get what you deserve from your divorce.
