When you and your spouse decide to file for divorce in New Jersey, you may anticipate a complex legal battle as you navigate alimony and child custody. However, one of the most complicated matters you may face during this process is the division of assets, especially if you or your spouse have RSUs or stock options. The following blog explores what you should know about these matters, including how New Jersey courts will divide these assets, as well as the importance of working with Morris County property division lawyers to discuss your legal options.
What Are RSUs and How Do They Differ from Stock Options?
Restricted stock units, or RSUs, are a performance incentive that allows employees to obtain a portion of their company’s shares when certain conditions, like performance goals or years employed, are met. This is an increasingly common option offered to employees as part of compensation packages.
RSUs are different than stock options, because employees don’t have to buy them. Instead, they are automatically vested, meaning that the conditions have been fulfilled. Stock options, on the other hand, give employees the opportunity to buy shares at a set price. For example, you may purchase shares of your company at $10 per share, when the market value is set at $30 per share.
How Are These Assets Divided in an NJ Divorce?
New Jersey adheres to the equitable distribution method of dividing marital assets during a divorce. This means that assets obtained during a marriage are considered the property of both spouses and are thus subject to distribution by the court. However, the division of assets will be equitable, meaning fair, as opposed to an even split of assets.
It’s important to understand that the court must consider if these assets are marital property, which typically depends on when the RSUs or stock options were granted and whether or not they have vested. For example, an RSU granted for work that has been completed during the marriage will be considered marital property, while those granted for future work performance may be considered marital property.
If the RSU has not yet vested at the time of the divorce, the court may allocate a portion of the share to the non-employee spouse. For example, if the court has decided to divide assets evenly, they may take into consideration that half of the vesting period occurred during the marriage, thus granting your spouse half of the RSUs.
How Do the Courts Value these Assets?
Determining the value of assets like RSUs or stock options can be complex, as there are a number of factors that must be taken into consideration. For example, stock options will fluctuate depending on the market at the time of the divorce. Additionally, RSUs have no real value until they have vested. As such, the court will often utilize data to determine the value of these assets. Similarly, you can enlist the assistance of an expert accountant to help you determine the value of these assets to ensure you receive the fairest and most accurate outcome for your divorce.
Going through a divorce is not just an emotional matter – it is a complicated legal and financial issue. At Leslie Law Firm, we understand how difficult it can be to navigate these complex matters while handling the emotional aspects of divorce. That is why our firm is committed to helping you fight for the best possible outcome for your specific needs. When you need help fighting for your best interests in a divorce, do not hesitate to contact our firm today to learn how we can assist you.
