Assets accrued by married couples over the course of their marriage can take on many forms. Connecticut residents facing divorce are keenly aware of the fact that in an equitable distribution state, these assets are divided based upon a court decision of what is "fair" to both parties. It may come as a surprise to some individuals, however, that this distribution extends to stock options of certain types.
Generally speaking, if a non-employed spouse is given stock options in a company by an employed spouse, the law looks upon these assets as "gifts." As a result, ownership rights to those options are the exclusive property of the non-employed spouse as would be the case with any tangible or intangible gift. However, this is not necessarily the case all the time.
For example, in the case of a non-qualified employer stock option, such options are considered marital property if and when a divorce is set in motion. This means they will be susceptible to the same equitable distribution laws governing the dispensation of all the couple's assets. The differences between these scenarios can be extremely complicated, which is why seeking the support of a professional in preparing for a divorce case involving this level of complication can be so beneficial to both parties.
Divorce is not easy, and it is even less easy to navigate complicated concepts like asset division while emotions run high and other priorities are asserting themselves. Connecticut residents thankfully have many resources at their disposal that can help to support couples through the divorce process. Seeking the opinion and guidance of a divorce professional can make a huge difference in how a separation agreement plays out.
Source: marketwatch.com, "After divorce, what happens to your employer stock options?", Bill Bischoff, April 21, 2015