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Valuing certain stocks in a Florida high-asset divorce

On Behalf of | Apr 6, 2021 | Blog, High Asset Divorce |

A high-asset divorce in Florida presents an array of unique challenges. These include everything from determining the propriety of a particular amount of money in the form of alimony or spousal maintenance to the division of stock options or restricted stock.

Understanding the basics: stock options and restricted stock

Stock options provide an employee the right to purchase stock for a set price at a future point in time. The concept is that the future price of the stock will be lower than the initial option price. This permits an employee the ability to turn around and sell the optioned stock at a profit.

Restricted stock is a security that are provided to an employee at no cost. An employee cannot sell or otherwise transfer the stock until a future point in time when certain conditions exist. For example, employees may be provided stock at no cost that they must hold until they hav been employed by the company for a specified period of time.

Valuation of stock options and restricted stock

In a high-asset divorce, valuing stock options or restricted stock can prove to be a complicated task. With guidance from an experienced divorce attorney and from a valuation expert, this task is not at all insurmountable.

Vested or not vested is a possible point of contention

Whether stock options or restricted securities are considered a marital asset can depend on whether or not these investments vested during the course and term of the marriage. If such an investment has not vested during the marriage, the possibility may exist that it won’t vest at all. Thus, such a stock might be excluded from the computation of marital property.

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