Heath-Newton LLP Counselors at Law

Practice Areas

Asset Division

What is required to reach a divorce settlement agreement or a property settlement agreement?
Dividing your assets is one of the most complex phases of a divorce. Reaching an agreement includes four steps:

  1. Decide what your needs and intentions are going forward.
  2. Determine how a court will characterize your property: either as separate or community property.
  3. Value the assets.
  4. Allocate the assets, keeping both your needs and the law in mind. This last step can result in a private divorce settlement agreement/property settlement agreement, or occur by a court order.

How will we handle our stock options in divorce?
In California, stock options are often part of an employee’s compensation plan. Dividing stock options during divorce can be complex. Stock options are often considered to be partly “community property” and partly “separate property.” The courts have broad discretion to allocate the community and separate property interests, including any stock options.

Some stock options are granted as an incentive to keep employees from leaving a company, and not as part of the compensation package. In other cases, stock options may be given as a “bonus” awarded at the sole discretion of the company. The bonus may be considered separate, and not community property, because it may not relate to work that was performed while married.

Even when a company labels its stock options “discretionary,” or “incentive based,” a court may look at the company’s conduct and the employee’s expectations and decide the label is inaccurate. For this reason, it is important to examine all of the facts and circumstances surrounding the grant of the stock options.

How do I get help understanding asset division or how our stock options will be divided?
Contact a lawyer at Heath-Newton LLP. We have experience handling the full range of asset division issues. We can help you reach a divorce settlement agreement or a property settlement agreement. Whether your matter involves complex trust assets, business partnerships, stock options or retirement plans, we can effectively represent your interests.

If you or your spouse (or registered domestic partner) received stock options relating to your employment during marriage, it is especially important to find an experienced family law lawyer. Your attorney will analyze the facts of your case and explain the variables impacting the allocation of your property.

Next section: Divorce