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Do you have to divide stock options in a divorce?

If you didn’t sign a prenup, few assets are off-limits when you file for divorce in California. Even stock options can be divided between you and your estranged spouse during the asset division process. These assets might not have technically materialized into wealth yet, but they’re still part of your marital pool of assets.

How do you divide stock options during a divorce?

Make sure you tell your divorce attorney if your estranged spouse has stock options in their company. Even if they’ve never outright stated it, stock options are easy to hide because they haven’t been converted into actual stocks. Ask your attorney to look into your estranged spouse’s assets to ensure that they’re not hiding anything from you.

When it comes to high-asset division in divorce, it’s important to know the value of your estranged spouse’s assets. Stock options can be difficult to value, but your attorney could help you figure out the estimated market price. From there, you can accept a portion of your spouse’s stock options or negotiate for a different asset with the same value.

Keep in mind that if you sell the stocks and make a profit, you might have to pay a capital gains tax. However, depending on the situation, your stocks might be taxed like regular income. Your attorney could help you figure out how much you owe if you decide to sell your stock options.

When should you hire an attorney?

If you’re dealing with a high-asset divorce, it’s important to hire an attorney as soon as possible. You and your attorney will have to take stock of your assets, evaluate your estranged spouse’s assets and find anything that they might be hiding. You’ll have to divide up virtually everything that you accumulated during your marriage, with a few exceptions.