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Can you seek a portion of your spouse’s stock option in a divorce?

California is one of a small number of states that still apply the community property concept when dividing assets between spouses in a divorce. Community property is a legal concept that essentially makes assets earned during marriage joint property of both spouses regardless of who acquired what.

Even if you stayed home while your spouse worked, you have a right to the assets and income earned during your marriage, especially if you provided unpaid labor that contributed to your spouse’s ability to succeed professionally, such as child care, housework or cooking.

When trying to determine what is a fair and reasonable way to split your marital assets, you first need to figure out the total value of your marital estate. You need to look at not just the salary that your spouse commanded but also incentives and benefits, including stock options.

Stock options accrued during a marriage are subject to division in a divorce

Just like a paycheck your spouse brings home, stock options and similar work benefits with real financial values represent their earnings an income during your marriage.

While those stock options may not have the same clear-cut value as a paycheck, their value can still impact property division in your California divorce by increasing the total value of your marital estate. Many factors, including the date when your spouse accrued the stock options, will determine how much of their value you should receive in the divorce.

How do you divide stock options?

Generally speaking, a worker who receives stock options from their employer will probably keep those benefits in place until they retire or the company reaches a point where cashing in stock options would be particularly lucrative, although those with unvested options may lose them if they take another job.

You have several different ways in which to request the division of your spouse’s stock options. The first and most straightforward involves having the courts approve a specific value for the stock options held by your spouse and having your spouse disburse payments equivalent to your reasonable share of their value. Alternatively, the courts can order your spouse to share a portion of the options when they cash them in later or use the value to offset other assets in your marital estate.

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