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Stock Options and Restricted Stock Units

Division of stock options and restricted stock units are common divorce issues in California because many employees receive stock options and stock units as part of their compensation packages. Not only may these assets be deemed community property, but future stock options and units may be taken into consideration for child support and spousal support calculations.

It is important to understand the different methods utilized by the court to value these assets, as the valuation method presented could dramatically affect the community’s interest.

For example, one method to value the community’s interest in stock options backdates the community’s interest to the employee spouse’s date of employment. A more common method values the community’s interest on the date the stock options were granted by the employer. (The former method will give the community a much greater piece of the stock options than the latter.) And just because a stock option has not yet vested does not mean the community has no share in it.

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