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 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
- The 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
Neil Cahn
Principal
Neil Cahn
Mr. Cahn’s practice is concentrated in divorce in both family and business settings. He represents clients with... | Read More
Mr. Cahn’s practice is concentrated in divorce in both family and business settings. He represents clients with issues relating to the division of property, spousal and child support issues; custody, visitation and other parenting issues, and estate disputes. He is involved with the dissolution of business entities, disputes between partners or other co-owners, employer/employee issues, and similar matters. Mr. Cahn has served on the Hofstra Law School Adjunct Faculty, and written and lectured for the State University of New York, various bar associations and professional organizations, as well as other lay groups.
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Stacy Francis, CFP, CDFA, CES
President & CEO
Francis Financial
Ms. Francis is a nationally recognized financial expert with over 20 years of experience in the financial industry. She... | Read More
Ms. Francis is a nationally recognized financial expert with over 20 years of experience in the financial industry. She is one of twenty of the nation’s leading wealth managers on CNBC’s Digital Financial Advisor Council, and frequently appears in media outlets such as Forbes, Kiplinger, The Wall Street Journal and USA Today. Ms. Francis is dedicated to furthering the financial planning profession, and is the Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter, the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA). She is committed to ongoing professional education, has attended the New York University Center for Finance, Law and Taxation, where she completed the Certified Financial Planner™ (CFP®) designation. Ms. Francis is a Certified Divorce Financial Analyst® (CDFA®), a Divorce Financial Strategist™ as well as a Certified Estate and Trust Specialist (CES™). As much as 10% of all Francis Financial proceeds are donated to charities, including Savvy Ladies™, a nonprofit organization founded by Ms. Francis to educate and empower women to take control of their finances. Savvy Ladies has helped over 20,000 women through free one-on-one financial counseling, workshops, and retreats.
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Shawn E. Lampron
Partner
Fenwick & West
Ms. Lampron focuses her practice on executive compensation and employee benefits for emerging growth businesses, public... | Read More
Ms. Lampron focuses her practice on executive compensation and employee benefits for emerging growth businesses, public companies, and venture and institutional investors. She works with clients to structure compensation and benefit programs covering the full spectrum of equity and cash compensation arrangements, including all types of employee stock options, restricted stock, employee stock plans, employment agreements, deferred compensation, and other fringe benefit arrangements. Ms. Lampron was most recently part of the team that represented Fitbit in its $732 million IPO in June 2015.
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