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How are stock options handled in a divorce?

On Behalf of | Nov 9, 2016 | Property Division |

Stock options are treated in the same way as any other asset in an Illinois divorce case. They will be divided up as the court decides. However, it can be easy to forget about this type of property or to overlook them. It is important to ask about whether your spouse has them and to do a check of investments for yourself, both because it is easy to overlook them and because they’re easy to hide. If you do not know about them, they will not be included in the division of your assets.

According to Forbes, another thing to keep in mind is that some stock options cannot be transferred. Therefore, if you want a part of your spouse’s stocks, they may have to be sold, which leads to a more complex situation because he or she will then be taxed on the profits. Taxes can then drag down the stocks’ values.

Speaking of valuing the stocks, you may need to do some research and get some help to figure it out. Determining how much an investment is worth is not always easy to do because the value can change quickly, and as mentioned, if they must be sold to divide them up, the worth can be reduced by taxes. In some cases, a stock may be worthless if its current trading value is too low. Keep in mind, though, that the trading value often changes, so it could be worth it to get a share of the stock options and sell them in the future if the value goes up.


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