Each year, certain married couples living in Tennessee decide that their marriages must end. If you’re dealing with this situation, you could be divorcing someone with a considerable net worth. Divorcing an executive can come with challenges that are worth learning about before the divorce proceedings go any further.
Dividing up stock options
Some of the most common types of executive compensation are stock options. Having company stock gives an executive incentive to lead a company toward better results and more profitability in the future.
With that said, executives sometimes have to wait for a vesting period to end before they can access their stock. If an executive can’t exercise their stock for years, this could mean missing out on considerable assets in a high-asset divorce and jeopardizing their financial future.
How to deal with restricted stock
It’s also possible to encounter restricted stock options in a divorce involving an executive. Similar to stock options, restricted stock awards also have vesting periods. Employees who quit or get fired before vesting periods are over lose their rights to this form of compensation.
Watch out for taxes
You’ll also want to consider taxes while valuing and dividing an executive’s compensation. Depending on the value of stock options and restricted stock awards, you could be setting yourself up to pay an unwanted tax bill. You can help avoid this problematic situation by determining what assets are worth fighting for.
If you’re divorcing an executive, there can be a lot at stake. Learning about all your options and preparing for the divorce helps ensure that you don’t miss out on the compensation you deserve.