When you and your spouse decide to get a divorce in Nevada, you need to be aware of how the court will determine community and separate property and how it will divide the community property between divorcing spouses. Do you or your spouse have stock options from work? How are stock options from employers divided in a divorce?
In the paragraphs below, an experienced divorce attorney from Naimi Mullins Law Group in Las Vegas, NV, describes how the courts will treat shares of stock from an employer in Nevada.
Nevada Is a Community Property State
Nevada is one of 11 states that practices equal distribution of community property rather than equitable distribution. Thus, if your divorce goes to court in Nevada, the court will evenly divide community property, and all property and debts acquired during the marriage qualify as community property with only a few exceptions.
Community property would include the marital home, both spouses’ incomes, and any other personal property acquired during the marriage. Separate property would include property owned before the marriage, after a separation, gifts from a family member, an inheritance, or lawsuit award such as from a personal injury case.
Nevada divorce courts will also divide debt evenly between divorcing spouses except under extreme measures of financial fault, such as if one spouse depletes the couple’s savings through gambling or addiction. However, moral fault for the divorce has little bearing on property division in Nevada.
Restricted Stock Units vs. Non-qualified Stock Options
Restricted stock units (also called “statutory stock options”) often require the employee spouse to meet a goal or benchmark. Employees may have to forfeit their restricted stock options upon termination and usually have one- to five-year vesting schedules.
Non-qualified stock options are a form of compensation allowing employees to purchase equity in the company. Employees can exercise vested shares at the current market price.
Division of Stock Options
How are stock options from employers divided in a divorce in Nevada? Shares of stock vested and exercised during the marriage would qualify for division under community property laws. The court would likely use the coverture fraction to divide unvested options, calculating a ratio between the earning period and the length of the marriage. The earning period for the coverture formula will also consider whether the options granted constitute past or future service.
Spouses may agree on a division of property outside of the court through mediation or a divorce agreement, which would allow them to divide property and debts equitably between themselves rather than subjecting their assets and debts to equal division by the court.
Contact an Experienced Las Vegas Divorce Attorney
Now that you know the answer to “How are stock options from employers divided in a divorce in Nevada?” contact an experienced Las Vegas divorce and family lawyer with Naimi Mullins Law Group. Call us today at (725) 444-7185 or contact us online to schedule a consultation at our office in Las Vegas, NV.
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