Dividing Restricted Stock Units In A Silicon Valley Divorce
When stock holds a space in your marital property, especially restricted stock units (RSUs), it can complicate an already complex high-asset divorce.
The attorneys at Silicon Valley Law Offices in Mountain View, California, understand the complexities of dividing high-value assets. SVLO works directly with renowned family law forensic CPAs to provide exceptional legal services to clients throughout Silicon Valley. Our experienced divorce lawyers will work with you to prioritize a fair settlement.
Explaining Restricted Stock Units (RSUs)
RSUs are a type of stock-based compensation often awarded to employees. They are granted under certain conditions, and the employee must meet specific criteria before taking ownership. RSUs are typically issued as part of a vesting plan, tying their distribution to a specified employment duration or the achievement of performance milestones.
These stock units give employees an interest in the company’s equity, but they hold no tangible value until vested. Once vested, RSUs are assigned a fair market value (FMV) and considered taxable income. A portion of the shares is withheld to cover taxes, and the remaining shares are transferred to the employee, who can sell them if desired.
RSUs As Marital Property
In California, community property laws dictate that assets acquired during the marriage are generally considered marital property. If RSUs are granted and vested while you are married, they will likely be classified as marital property and included in the divorce settlement. Unvested RSUs, however, present a more complex challenge.
The future value of unvested RSUs complicates their division in divorce proceedings. The primary issue is whether these RSUs should be regarded as current assets or future income. This distinction requires careful legal consideration and often necessitates help from a divorce lawyer.
Call For Zealous Representation
When valuable stock units are at stake, seasoned attorney guidance is essential and will help lead to a fair and equitable divorce settlement. Call SVLO in Mountain View at 650-546-7595 to discuss your case and take the first step in protecting your share of complex marital assets. Let our knowledgeable attorneys provide the support you need during this challenging time.