Personalized Legal Attention Call


Make It Our Fight

At White & White, Attorneys at Law, we care about our clients and about helping them improve their lives.

What happens to stock options during divorce?

On Behalf of | Jan 8, 2020 | Divorce

Although Tennessee is not a 50-50 state when it comes to dividing assets during divorce, there could still be some surprises. Namely, stock options could be one of your concerns if you fall into the high-asset category. 

On a basic level, the court could divide all of the assets that it deemed to be part of the marital estate. Therefore, you would probably want to pay attention the classification of your stock options in addition the way they should be divided — if at all. 

In the main section on property division in the Tennessee Code, you can find two subsections that specifically mention stock options. The first subsection establishes that both vested and unvested stock options could be subject to division, along with various other types of employment benefits. The stipulation is that these benefits relate to employment during the marriage. 

The second subsection addresses what could happen when only part of the value is added during the marriage. Specifically, it says that the court could take reasonable steps to identify how much should be separate property and how much should be marital property. 

For example, imagine you had two sets of stock options. One was granted to you explicitly as incentive to join for a job you began before you got married. Another set was granted as a reward for high performance during your marriage. It is likely that the first set would be separate property and the second would be marital property.