Distributing any marital property during a divorce can be complicated. Distributing stock options and other complex investments at the end of a marriage is even more so. Since stock options have no value until they are exercised, but their true value is only determined when they are exercised, ensuring equitable distribution in advance is no easy task. There are several ways a court might go about this, and Reifman Law Offices can help you navigate this complex process.
Attorney Arkady Reifman has almost 20 years of family and divorce law experience. No matter how complicated your financial and investment situations may be, Reifman Law Offices is equipped to address them. We will seek an agreement that is fair and that leaves you in a good position, but if litigation becomes necessary, you will have strong advocacy at Reifman Law Offices.
In Illinois, stock options are generally marital property as long as they were granted to one or both spouses during the marriage. The normal exceptions that apply to simpler types of property apply to stock options as well. For example, if the stock options were a gift to just one spouse, or part of an inheritance, they do not become marital property but remain the separate property of the spouse to whom they were granted.
If stock options were granted to one spouse as part of employment compensation, they are usually marital property, just as each spouse’s wages earned during the course of the marriage are. However, employee stock options can be just a little more challenging than simple wages as they normally are not transferable. This means that the court can not simply order that a certain share of unexercised employee stock options be turned over to the non-employee spouse immediately upon divorce. The court will have to find another way to ensure equitable distribution.
Reifman Law Offices understands the complexities of equitably distributing all marital property, whether you and your spouse are dividing a simple savings account or employee stock options. Attorney Arkady Reifman has guided many clients through complex property distributions during his nearly 20 years in practice and can help you too.
Stock options have no concrete value right up until they are exercised. The fluid nature of stock prices and other complex investments makes it impossible for the court to ensure the equitable distribution of unexercised stock options or open investment portfolios. Tax considerations can further complicate the issue. Most spouses going through a divorce agree that immediately exercising some stock options and liquidating other investments is not the right answer, as some assets are expected to appreciate and both spouses will ultimately benefit from waiting. Yet, the court must enter a final order regarding how all marital assets will be distributed before it can dissolve a marriage.
One way the court may do this is by issuing an order that governs how any payments received from exercising a stock option in the future will be distributed. This “wait and see” approach is sometimes called “deferred distribution.” The attorneys at Reifman Law Offices can explain what other options may be available to you depending on your and your family’s individual needs.
We assist individuals and families in Cook, Lake, and DuPage counties.
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