Legal Updates

For a divorce asset balancing purposes valuation of employee stock options will take place only upon ‎their exercise

June 5, 2017
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An employee received employee stock options from the employer.  When the employee got divorced it was held that the wife is entitled to half of the employee's options received during the marriage as part of the marriage asset balancing, but the question arose as to how to value the options.

The Court held that the options are non-tradable and thus it is not possible to value the options for the asset balancing at this point.  Because even tax-wise the options will be taxed only upon exercise, the wise is indeed entitled to half of the options, but the date of their valuation for asset balancing purposes will be only at the date of their exercise.