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How stock options may figure into a Nebraska divorce

On Behalf of | Aug 29, 2019 | High-asset Divorce

Some men in the Omaha area may be fortunate enough to have an employer who offers stock options to them. A popular fringe benefit among executives and other professionals, stock options allow a person who receives them to purchase valuable company stock at a discount.

Basically, at the time a person receives a stock option, he receives a promise to be able to buy up to a certain number of shares of his company’s stock at a certain time and at a certain price. The idea behind this promise is that, over time, the value of the stocks will grow.

For example, someone who receives the option to buy 1,000 shares of stock at any point during the next five years at $10 a share makes $10,000 if, five years down the road, he can use the option to buy stock currently worth $20 a share for 50% off. Moreover, the man is at that point the owner of stocks that will hopefully continue to grow.

In a high-asset divorce or legal separation, putting a fair value on a man’s stock options can be tricky. Like other property, stock options will ordinarily be divided between a husband and wife if they were earned during the marriage.

However, because a lot of their value depends on what might or might not happen in the future, understanding how much a stock option is worth can be a complicated legal and financial question. Moreover, improperly evaluating these assets could put a man at an unfair financial disadvantage following a split.

As with other fringe benefits and hard to value assets, a man who is going through a divorce or separation and owns stock options, or has a spouse who owns stock options, should consider getting the help of an experienced legal professional.