Skip to Content

Could Your Spouse Be Holding Restricted Stock?


When high-net-worth individuals get a divorce, they’ll think about the house, the 401k and IRA accounts, the vacation home, the real estate assets, and other obvious assets that need to be divided. But many financially complex divorces also involve stock options, or for the purposes of this article, “restricted stock options,” which not all spouses are aware of.

“What is restricted stock?” It’s company shares that are granted to employees at no cost, but they cannot be transferred until certain conditions are met, such as being employed with the company for a set period of time.

Joining a Company Early On

Can you imagine joining a company during the startup phase, the company growing exponentially, and then you benefiting because of its growth? Well, that’s a lot how restricted stock options work for some people.

They’ll join when the company in its infancy stages and be given restricted stock options, which hopefully, will let them cash in big when the company expands over the years.

The employee buys into the company’s vision and hopes that one day their decision to join during the lean years will make them rich.

Indeed, restricted stock options have made some employees very wealthy, but that’s more the exception than the norm. Even still, these assets can be a valuable component of a corporate compensation package, which is why they’re increasingly split in divorce settlements.

Determining if Your Spouse Has Restricted Stock

If you don’t know if your spouse has restricted stock, that doesn’t mean it isn’t there. Since restricted stock options don’t show on W-2 forms and tax returns, it’s understandable why spouses often have no clue about their existence.

If your spouse is capable of hiding assets, he or she probably won’t be disclosing their restricted stock options either, especially if you’ve never discussed them. Our advice is to have a Dutchess County divorce lawyer from our firm take special steps to determine if your spouse is holding any restricted or traditional stock options, and when the options can be exercised or sold.