Scared of losing your investments? Find out how your stock holdings are divided in a divorce?
- August 24th, 2020
- Cheryl McGirr
- Comments Off on Scared of losing your investments? Find out how your stock holdings are divided in a divorce?
As an investment, stock represents a percentage share in the ownership of a business. When the business does well, the value of the investment will typically increase, and when the company does poorly or under performs, the value of the stock will typically decrease.
There are various options when splitting the assets or the shares that are community property. First, selling the stocks, and splitting the proceeds seems like the most natural solution, but many people may want to keep long-term investments. Selling shares can also have potential negative tax consequences. Second, splitting the investments, your holdings can be split to achieve a fair division. For example, one person can take all the stock in one company while the other takes all the shares in another company with similar value. The number of assets in anyone company can also be split equitably.
How are stock options divided in a divorce?
Employers often give their employees the option to buy company shares, called a stock option. There are two basic types of employment-related savings option plans. The first is generally available to all employees as an employee benefit. The second is usually for executives and includes the stock option as a type of compensation. In Texas, investment options acquired during the marriage constitute a contingent interest in property. They are community assets, at least in part, even if they are not vested at the time of divorce.
Valuing shares and stock options can be quite complicated, to ensure treasury options are divided equitably in a divorce, it is important to contact an experienced family law attorney.