Division of Stock Options and Other Employment Benefits
Employment benefits such as stock options and retirement portfolios are considered community property for purposes of property division in divorce under California law. For retirement benefits to be considered as community property the benefits must have been earned during the marriage. Any benefits earned before marriage and after separation are separate property. In dividing community retirement benefits they are segregated from any separate property benefits that are in the account. Benefits contributed during the marriage will include growth on the contributions. Benefits contributed before marriage or after separation will as well include growth on the contributions.
Stock-option grants issued during the marriage are community property. They are 100% community property so long as all options vest, meaning the right to exercise the options, occurs before separation. Any options that are granted during the marriage but vest after separation are partially community and partially separate assets.
The division of such benefits and the associated tax complications can be very complicated. Seeking legal counsel from an experienced lawyer will ensure that your property division is handled properly. Contact a San Jose employee benefits lawyer at the law office of John S. Yohanan to discuss your case in a free initial consultation.Community Interest in Employment Benefits
Under California's community property laws, all property acquired during marriage by either spouse is considered marital property that is subject to division in divorce, including the value accrued in an employee benefits package during your marriage.
Attempting to determine the value acquired in employment benefits, including pensions, 401(k)s and other retirement accounts, stock options, profit-sharing plans, and investment portfolios during the course of the marriage can be very complex and involve several factors that must be carefully considered.
Calculations for employee benefits are not always straightforward. To ensure a fair and reasonable divorce settlement, I will analyze your employment benefits and recommend employment of an appropriate expert if necessary to determine the community interest in various employment benefits. Typically these experts are retained jointly, by both parties. They are referred to as Evidence Code §730 experts. Retaining a joint expert helps to keep your costs reasonable.Palo Alto, California, Asset Division Attorney
I have more than 30 years of experience as a Bay Area divorce attorney, giving me insight into matters involving division of stock options and other employment benefits in divorce. If you require assistance in determining the extent of the community interest in your or your spouse's retirement benefits contact the law office of John S. Yohanan at (408) 297-0700 or via our online form.