Are Restricted Stock Units Subject to Equitable Distribution in a New York Divorce?

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At large companies, compensation packages for employees sometimes include additional compensation measures that work to encourage good performance overtime. This can include restricted stock units (RSUs) in some cases. Individuals who have RSUs and are going through a divorce may wonder if the assets are subject to equitable distribution, even if it has not fully vested. Continue reading below to learn more and contact an experienced New York divorce attorney for assistance with your case.

How are RSUs Divided in a Divorce?

In New York, courts follow the process of equitable distribution to divide assets in a divorce. This means marital assets are divided based on what is fair. Certain stock options such as RSUs acquired throughout a marriage are considered marital property in New York and can therefore be divided in a divorce. The only exception is if the holder can prove the stock was acquired as a gift or inheritance, or they exchange it for other non-marital property. In order to determine if a stock option was granted as a reward for past services, the plan documents can be examined. This includes the Stock Options Plan and the Options Statement to find the exercise price, expiration date, and other relevant terms.

The value of a stock option depends on whether it is publicly traded or from a privately held company. The value of publicly traded stock is based on its fair market value at the date of trial or the date of legal action. Stock from a privately held company can be more complicated to determine and usually requires business valuation.

How Can I Protect my RSUs?

It is important to protect the assets that you can during a divorce, such as RSUs. A knowledgeable attorney can provide assistance during this time and point you in the right direction to be prepared. This can include gathering the right documentation, such as: 

  • Testimony of you and your employer
  • A copy of your stock plan
  • Correspondence and additional documentation related to the stock award
  • Vesting schedule
  • Stock plan statements

Contact our Firm

Peter V. Mandi, Esq. is an experienced divorce and family law attorney located in Bohemia, New York. Our firm understands the impact a divorce can have on your life. If you require strong and dedicated legal representation in Long Island, New York, please do not hesitate to contact Peter V. Mandi & Associates, Inc. today.

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