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Handling Stock Options In Chicago Divorce Settlements

Last updated on June 11, 2024

Stock options can create considerable wealth for the holder when a company’s stock price grows exponentially. However, valuing unexercised stock options during divorce can be complex.

For skilled and experienced handling of stock options in a Chicago divorce, contact the lawyers at Lake Toback DiDomenico. We help highly compensated employees and their spouses determine values for stock options, stock purchase plan accounts, bonuses, long-term incentive plans, deferred compensation, profit-sharing plans, supplemental retirement plans and other forms of executive compensation.

How To Divide Stock Options In Divorce

A stock option is a right to purchase an amount of stock at a predetermined price within a certain period of time. Once the stock option is “vested,” it can be profitably exercised if the stock price is higher than the option price. If the stock price drops below the option price, it is “underwater” and has no value.

Stock options awarded during the marriage, and in some cases immediately after the marriage ends, may be considered marital property. Determining the value of unexercised stock options is an important issue both to the employee who receives them and to the spouse who may be entitled to a rightful share.

Generally, stock options cannot be transferred to a nonemployee spouse. However, a court can retain jurisdiction of the property division case until a future date when the stock options are exercised.

Contact Us To Discuss Stock Options

Lake Toback DiDomenico is located in the heart of Chicago’s Loop. Our office is five blocks west of Lake Shore Drive and 10 blocks east of I-90/94, at the southeast corner of Washington and Dearborn streets. To contact our attorneys, call 312-288-8985 or contact us by email.