When a divorcing couple must divide their marital property, they may face significant legal questions around dividing a spouse’s stock options or restricted stock. An experienced divorce attorney can help you understand how Missouri law treats complex assets like stock options and restricted stock in divorce.
Understanding Missouri’s Equitable Distribution Law
Missouri uses an equitable distribution system for dividing marital property. In equitable distribution, a court divides a couple’s marital estate fairly, though not necessarily equally. Factors that courts consider in determining what a “fair” division looks like include:
- The spouses’ respective economic circumstances, including the desirability of awarding the marital home to the spouse with primary custody of the couple’s children
- Each spouse’s contribution to acquiring a marital asset, including contributions as a homemaker
- The value of non-marital property owned by each spouse
- The conduct of the parties during the marriage
- The couple’s custodial arrangements
Equitable distribution only divides marital property, which the law defines as property acquired during the marriage, except for:
- Property acquired by a separate gift
- Property acquired by inheritance
- Property acquired in exchange for property acquired before marriage or in a separate gift or inheritance
- Property acquired after a decree of legal separation
- Property excluded under a valid pre- or postnuptial agreement
- Increase in value of separate property unless marital assets or spousal labor contributed to such increase
Each spouse gets to keep their separate property.
How Missouri Classifies Stock Options and Restricted Stock
Missouri may classify stock options and restricted stock as marital property when a spouse acquires those assets during their marriage. However, the vesting of stock options and restricted stock may affect whether they qualify as separate or marital property. Vested options and restricted stock will likely qualify as marital property. However, unvested options may result in some options and stock becoming marital property and some remaining separate property, depending on factors such as the timing and reason for the grant. For example, grants awarded for past work before marriage may qualify as separate property, whereas incentives for future work may qualify as marital property.
Valuation and Division Challenges
Some of the challenges that couples may face in valuing and dividing stock options and restricted stock in divorce include:
- Valuing stock options and restricted stock may become more complex due to unvested grants, vesting contingencies, and fluctuating market values of the issuing company
- Deciding options for dividing assets, such as deferring distribution of unvested grants until vesting or assigning a present value to include the marital estate
- Corporate restrictions on the transfer of equities may preclude couples and the court from transferring options or restricted stock from one spouse to the other
- Potential tax consequences for both spouses from dividing stock options and restricted stock, including possible penalties for transferring tax-advantaged options or stock
Contact a Divorce Attorney Today
If you or your spouse owns stock options or restricted stock, you need experienced legal counsel to help you through the property division process in divorce in Missouri. Contact the Law Office of Amy L. Gervich today for a free initial consultation with a knowledgeable divorce lawyer to discuss your legal options.
