Stock options might not feel like tangible property, but if you or your spouse earned them during the marriage, they carry real value — and courts don’t overlook them when it’s time to divide assets.
Whether you received options from a startup, a public company or an executive compensation package, you’ll want to understand how they factor into a divorce before the paperwork moves any further. So, let’s start with the basics.
Stock options are now a common asset in divorces
You are not alone if you’re unsure how stock options fit into the divorce process. More companies now offer them, especially in Southern California’s tech and aerospace sectors. Business owners, executives and professionals often receive stock options as part of their compensation, and those benefits usually enter the conversation during property division.
But just because they are common doesn’t mean they are easy to handle, especially when it comes to legal classification.
Stock options are treated as property under California law
California law treats stock options earned during the marriage as community property, even if they haven’t vested. If one of you received them before the marriage or got them as a gift or inheritance, they may count as separate property. But no matter how they are classified, both of you must disclose them fully and honestly.
Stock options come with unique challenges in divorce
Unlike a bank account or a house, stock options don’t hold a fixed value until someone exercises them, and that makes division more complicated. Courts often estimate their value based on grant dates, vesting schedules and current market conditions. When a spouse hides or undervalues options, the court can issue penalties, including awarding a larger share to the other person.
If you want to avoid those headaches, preparation is key, and it starts with getting your paperwork in order.
Dividing stock options fairly means getting organized early
Gather your offer letters, grant agreements, vesting schedules and any relevant employer documents. When you know when the options were granted and what conditions apply, you’ll have a clearer picture of what falls under community property. The earlier you organize this, the easier it becomes to protect your share.
The sooner you get clarity, the more control you’ll have
You don’t need to become an expert on stock options — but you do need to know what exists, what might be shared and how to start protecting your interests. The more clarity you bring to the table now, the more control you’ll have as the divorce moves forward.
