Under Massachusetts law, stock options, both vested and unvested, are marital assets which may be included when dividing the marital estate in a divorce action.
In order to determine whether and to what extent stock options may be included in the marital estate, a finding must first be made as to whether the stock options were granted for efforts expended before, during, or after the marriage.
If the options were granted for efforts expended before or during the marriage, they should be included in the marital estate.
Stock options granted for efforts expended after the marriage may still be included in the marital estate if such efforts were attributable to the marital partnership. By way of example, if the non-employee spouse contributed to the employee spouse’s ability to achieve the position for which the stock options were granted, those options may be properly included in the marital estate even if granted after the parties’ separation.
In making a finding whether the stock options were granted for past, present, or future services, it is suggested that judges look to:
• Testimony from the employee spouse;
• Testimony from the employer;
• Testimony from an expert witness, if available; and
• The employee’s stock option plan.
Judges may also consider whether the stock options were” intended to (1) secure optimal tax treatment, (2) induce the employee to accept employment, (3) induce the employee to remain with the employer, (4) induce the employee to leave his or her employment, (5) reward the employee for completing aspecific project or attaining a particular goal, [or] (6) be granted on a regular or irregular basis.'”
The spouse challenging the inclusion of the stock options in the marital estate has the burden of proving the stock options were granted for efforts expended after the dissolution of the marriage. That spouse also has the burden of establishing that the other did not contribute to the acquisition of the options.
Even if the spouse meets his burden, a judge may still divide the stock options “
As a result, individuals confronting this issue should not do so alone. The Law Office of Renee Lazar is experienced in all aspects of family law and can navigate you through the divorce process.strong attorney client relationship. Whether you are a new or existing client, we’ll be quick to respond to your needs with the knowledge necessary to find solutions to your legal concerns.
Contact Attorney Lazar at 978-844-4095 to schedule a FREE one hour no obligation consultation.