How are Restricted Stock Units During a Divorce in New Jersey?

When companies offer their employees compensation packages, they sometimes include more than the traditional salary. In order to promote good performance over a period of time, they may offer restricted stock units (RSUs). This compensation is not received immediately, which is why it can be difficult to divide in the event of a divorce.Continue reading below to learn more and contact an experienced New Jersey divorce attorney for help with your case.

How are RSUs Divided in a Divorce?

Recently, the New Jersey Appellate made a ruling that designated how stock options should be handled in divorce proceedings. The case was in regard to whether stock options granted during a marriage, but not to be used until after the divorce, can be divided in the proceedings. The ruling was that “future performance” of a stock option is not considered marital property and can therefore not be divided in a divorce. This is due to the fact that the majority of the award would not be fully vested until after the divorce. 

While this is true, the Appellate court did establish circumstances under which stock options could be divided, including if:

  • It has been made during the marriage and vests prior to the date of the divorce complaint
  • It is made during the marriage for work performed during the marriage, but becomes vested after the date of the divorce complaint
  • It is made during the marriage, but vests following the date of the divorce complaint. This is unless there is a material dispute of fact regarding the stock, either in whole or in part, that the RSUs were given in consideration of the future performance of the employee

How Can I Protect my RSUs?

If you have certain stock options you want to protect in a divorce, such as RSUs, it is important to retain the services of a skilled attorney who can help prepare you. This can include gathering the following documentation:

  • Testimony of you and your employer
  • A copy of your stock plan
  • Correspondence and additional documentation related to the stock award
  • Vesting schedule
  • Stock plan statements

Contact our Firm

If you require strong legal representation for matters related to divorce or family law, Haber Silver Simpson & Russoniello is here to help. We proudly represent clients in Morris County and throughout the state of New Jersey. Contact our firm today to schedule a consultation.