When stock options are involved in divorce negotiations, complications can arise. An Orange County family lawyer discusses the impact of such options.
Valuing the Options
Stock options are usually offered by employers and represent the opportunity to purchase partial ownership of the company at a specific time and price. When considering stock options, the Orange County family attorney must also consider the value thereof and the factors that affect it. Whether or not the options are valuable depends upon whether the price of the stock on the open market is greater than or less than the price offered by the employer.
Assuming that the employer offers the option at $50 per share for the option to buy 100 shares and the market price of the stock is $30 per share, the employee would do better to purchase the stock on the market. If the market price is $75, then exercising the option makes sense as the options are worth more. The impact on the marital estate from the perspective of the Orange County family lawyer will be an issue either way.
Market value is not the only factor influencing the value of stock options. Depending upon the jurisdiction, your Orange County family lawyer may take into consideration how the stock is valued (by what formula) according to case law. Since the time frame of when the employee used or obtained the options can also affect the value, the advice of a financial expert may be helpful. This is particularly true in cases of large holdings or of serious controversy between the divorcing spouses.
An experienced Orange County family attorney may recommend considering several factors before consulting a financial expert. Unless the amounts are large, consulting the expert may cost more than the options are worth. Also, unless someone is in a position to exercise the options, they become useless.
For More Information
If you need help, contact Orange County family lawyer Bethanie Fanti by calling 714-505-3108 today.