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Stock options can present complex property division issues

| Aug 15, 2019 | High-asset Divorce |

Executives, professionals and other highly compensated employs who live in Broomfield or in other parts of the greater Boulder and Denver areas often get to enjoy various employee perks and benefits that often have a lot of monetary value. For instance, employees may be offered what are called stock options. As the name implies, a stock option gives the employee the choice, or option, to buy a certain number of shares of company stock for a certain price at a future date, oftentimes years down the road.

A stock option is valuable when it gives someone the ability to purchase stock at what amounts to a discount. For instance, if a person has an option to buy 100 shares of stock at $50 a share, but the stock is at that point selling on the market at $100 a share, then the employee instantly makes $5,000 just by exercising his or her stock option.

Like retirement plans and many other types of employee benefits, stock options are likely to be considered marital property subject to division in the event of a divorce or legal separation. Therefore, someone going through a split is going to have to know a little bit about how to put a value on their stock options.

Doing so can be a complicated task. Unlike stocks owned outright, stock options, even if for a publicly traded company, cannot be valued simply by looking up a sale price on a given day. The value of a stock option depends on a number of factors, and it often requires the help of both a financial expert and a legal professional with experience in high-asset divorces to sort out. Protecting this type of asset is often vital when going through the divorce process.