Divorces are hard. When you are dividing assets, it’s important to consider what your employee stock options are, whether they be restricted or otherwise. Dividing atypical assets can be challenging.
An important factor in your Texas divorce is what your employee stock options are because different companies have different stock options at varying prices. However, there are two main ways that companies go about offering up stocks: They offer up what is called a grant price, which enables employees to buy a stock for less than the full price for a stock, or a restricted stock option.
For example, if stock for Walmart is worth $400, as an employee, you’d only have to pay, say, $50. Then, if the stock increases in value, you can make as much as $3,000 dollars. The downside is that while you may need to pay less to buy into the stock whatever profit you receive from said stock will likely be generously taxed.
Another option that companies often offer is buying into a restricted stock. While the restricted stock option allows for you to retain most of the profit, you aren’t allowed to touch the stock for a defined period of time. This means that if you try to leave the company before the allotted time, you have to pay a higher tax rate similar to that of normal employee stocks.
Because both of these stocks have a set time before you can cash them out, if you choose to cash it out early because of a divorce, you could potentially forfeit a lot of your profit. Additionally, many employers do not allow stocks of any kind to be transferred over to another party.