Divorce and Division of Stock Options and Restricted Stock Units
Identifying, Classifying, and Valuing Options and RSUs for Equitable Distribution and/or Income Availability
Recording of a 90-minute CLE video webinar with Q&A
This CLE course will prepare family law practitioners and financial experts to better represent litigants in identifying, classifying, and valuing stock options and restricted stock units (RSUs) for purposes of both equitable distribution and income availability upon divorce or in the context of post-judgment modification.
Outline
- Accounting/tax issues
- Overview of employee stock options
- ISO vs. NQSOs
- RSUs
- Tax implications
- Valuation issues
- Intrinsic value
- Mathematically derived values
- Matrimonial/legal issues
- Case law history
- Deferred distribution methods
- Present valuation with offset
- Value used for support
- Defining if an option is subject to distribution
- Recent developments
- Case law
- Distribution (two-step process)
- Determine the "marital portion" subject to equitable distribution
- Distribute vested options only
- Present evidence of reasoning behind options awards to determine whether earned income occurred "during the marriage" or "through marital efforts"
- Coverture fraction/time rule
- Method of distribution of "marital portion"
- Valuation and offset
- Intrinsic value
- Black-Scholes method of valuation
- In-kind distribution
- Transfer of title
- Trust device
- Determine the "marital portion" subject to equitable distribution
- Stock options as income for support
- Previously distributed options
- Existing but undistributed options
- Projection of future income from past awards
- Other issues to consider
- Options to be expensed by corporations
- Sarbanes-Oxley Act of 2002
- Revenue Ruling 2002-22
- Overview of employee stock options
Benefits
The panel will review these and other high priority issues:
- What is the difference between a vested and unvested stock option?
- How are different stock options identified?
- What "time rules" are used in various venues?
- What are the different valuation methods to value a stock option--and when should they be applied?
- When should stock options be considered as marital assets subject to equitable distribution, and under what circumstances can and/or should stock options be considered income?
- How does one equitably distribute a stock option?
- What challenges do RSUs present that are different than stock options?
Faculty

Benjamin P. Thomas
Director
Alvarez & Marsal
Mr. Thomas specializes in economic damages, litigation support, and valuation for purposes of insurance and litigation... | Read More
Mr. Thomas specializes in economic damages, litigation support, and valuation for purposes of insurance and litigation matters. His primary focus is to support clients in business economic damages. Previously, he was in public accounting for a large regional tax and audit firm. He ia a CPA and is a CFE.
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Charles F. Vuotto, Jr.
Of Counsel
Starr Gern Davison & Rubin
Mr. Vuotto's practice focuses on family law. He is a Fellow of the American Academy of Matrimonial Lawyers and Past... | Read More
Mr. Vuotto's practice focuses on family law. He is a Fellow of the American Academy of Matrimonial Lawyers and Past Chair of the Family Law Section of the New Jersey State Bar Association. He is a frequent lecturer at both family law and CPA conferences and seminars. He is the Editor-in-Chief of the New Jersey Family Lawyer as well as a published author on a variety of family law topics.
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