Stock options, though easily overlooked, could be valuable

People who get divorced often think about their rights regarding company-controlled assets. This doesn’t just mean a regular paycheck, but could also mean benefits or a pension plan. One thing they may often overlook, though, is the value of stock options.

Stock options typically can be used in the first decade that the employee is with the company. Essentially, they mean that the employee can purchase stock in the company at the date of his or her choosing, buying the stock for the price it is at when the options are offered. This can be very valuable, and this asset may need to be split during a divorce just like anything else.

For example, the shares may be worth $10 each when the option is offered. Ten years later, if the company is doing well, the shares may be worth $20 each. The employee can then buy these $20 shares for $10 each, instantly doubling his or her money. This eliminates the risk to the employee, as he or she can stand to see the stock lose significant value and still come out ahead overall. The employee also has 10 years of data to predict what the stock will do.

If you’re heading toward divorce in Massachusetts, do not forget to consider stock options. Find out if your spouse has any and what value they may hold. Find out if stock has already been bought or if the right to buy simply exists. Above all else, make sure you know if you have a right to some of this valuable asset.

To find out more about dividing wealth during a divorce, please check out our informative website or contact us today, and we’d be happy to answer all of your questions.

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