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Stock option division during Divorce

Sunnyvale, CA |

If you were given stock during marriage from a start up company you worked at and the company was not public until the day of separation and had no value. The company goes IPO after the separation date but before the final Divorce.Does these stock required to be divide equally? What does not califonia law say about division of stocks in Divorce. Additionally, any link with more details will help.

Attorney Answers 1


According to California family law, assets from any sources must be divided during divorce. If the stock options are community property, then yes they must be divided. You can agree upon a date for the valuation of the stock option or the separation date or divorce date can be used for the valuation of the options. A court is more likely to use the separation date to settle to value but if the assets but since there would be no value before IPO, in this case the divorce date is more likely to be used.

In order to divide the options, you as the option holder must pay the other party money of the options, since most company would not allow option to be transferred to a non-employee or family member.

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