Pennsylvania Family Law and Divorce
Lisa Marie Vari & Associates, P.C.

Divorce and Stock Options

By Lisa Vari on G+

Our Pittsburgh Divorce attorneys recently brought you a story regarding Best Buy's CEO Hubert Joly and having to sell his stock shares for his divorce settlement. Today we discuss stock options in a PA divorce and how this might be handled in Pennsylvania.

How would this issue be resolved in Pennsylvania?

Pennsylvania Equitable Distribution Attorneys

Pennsylvania is an equitable distribution state - meaning that during the divorce process, spouses attempt to "equitably" or "fairly" distribute the assets and debts. "Fair" in each case depends on the context including the signficance and money value of the assets, the amount and severity of the debt, among other factors.

Stock options are considered assets for property division in Pennsylvania. Therefore, Joly's shares in Best Buy would be considered an asset in a PA divorce and potentially subject to property division based on their value. For stock options, it depends on whether or not the stocks are "vested" or not. There are also various ways that a court will value the stock options.

The main factors utilized to determine the value of stock options for a divorce are as follows:

(1) whether the options were granted before the marriage, during the marriage pre-separation, after separation or after the date of divorce;

(2) whether the options vested during the marriage, after separation or after the date of divorce;

(3) whether the options become exercisable during the marriage pre-separation, after separation or after divorce;

(4) whether the options contract established any specific limitations;

and (5) whether the employer granted the options to the employee as compensation for past services, an inducement for future services, or as a payment for both past and future services.

Determining the value of these assets can be complicated, and it is best to seek the assistance of an experienced PA family law attorney in order to determine how to value your stock options (or your spouse's) for purposes of divorce. Contact us at Lisa Marie Vari & Associates today!

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