In the tech industry, compensation frequently goes far beyond salary alone. Equity grants, stock options, and restricted stock units (RSUs) are often the most valuable and most complicated components of a professional’s financial portfolio. However, when a marriage ends, the value and ownership of these assets can become points of contention. Divorce for tech professionals involving equity, stock options, and RSUs is rarely straightforward, as vesting schedules, performance conditions, and volatile valuations must be considered to avoid costly mistakes. If you or your spouse is a tech professional and you want to learn more about how to protect your assets in a divorce, it is smart to speak to an attorney. At McClure Law Group, our Dallas divorce attorneys have substantial experience advising clients in the technology sector, and we can help you navigate the legal complexities of your divorce and safeguard your financial future.
Classifying Equity and Deferred Compensation in DivorceThe first critical step in handling divorce for tech professionals involving equity, stock options, and RSUs is determining the character of these assets under Texas law. Generally, property acquired during a marriage is presumed to be community property, meaning both spouses have a claim to it upon divorce. However, equity compensation, such as incentive stock options (ISOs), non-qualified stock options (NSOs), restricted stock units (RSUs), and performance shares, may straddle the line between separate and community property depending on the timing of the grant, vesting schedule, and purpose of the award.
For example, if a spouse receives stock options during the marriage as compensation for current or future work, those options can be considered community property, even if they are not yet vested (although sometimes they will be considered proportionately community and separate property). On the other hand, if the options were granted for services performed before the marriage, they may be separate property. Determining the character of equity compensation requires a detailed analysis of employment contracts, grant documents, company policies, tax records, and applicable marital-property laws.
Valuation and Division of Tech Compensation PackagesDivorce for tech professionals involving equity, stock options, and RSUs often requires creative and informed strategies to value and divide deferred compensation fairly. Equity-based assets are rarely straightforward. Vesting schedules, performance milestones, blackout periods, and restrictions on transferability all affect how and when these assets can be accessed and valued. Further, the value of shares in a private startup or early-stage company may be speculative or difficult to quantify in the absence of a public market or recent funding round.
In these situations, courts must determine not only the current worth of the asset but also its potential future value, risk of forfeiture, and tax implications. If options or RSUs are unvested at the time of divorce, Texas courts may treat a portion as community property and use a time-based formula to determine the divisible interest. This may result in deferred division, where a spouse receives a share only when the options vest, or a buyout based on present value.
Navigating Employment ConsiderationsDivorce for tech professionals involving equity, stock options, and RSUs also implicates significant employment-related concerns. Some tech companies have internal policies that restrict or prohibit the transfer of equity interests to anyone other than the employee. These limitations can affect how divorce decrees are drafted and enforced.
Consult an Experienced Dallas Divorce AttorneyFor many tech professionals, divorce not only signifies the end of a marriage, it also impacts their financial well-being. If you want to learn more about divorce for tech professionals involving equity, stock options, and RSUs, you should meet with an attorney as soon as possible. At McClure Law Group, our experienced Dallas divorce attorneys offer strategic guidance tailored to the realities of the tech industry, ensuring that our clients’ interests are fully protected now and in the future. Our principal office is located in Dallas, and we also offer meetings by appointment in our Collin County office in Plano. We represent clients throughout Dallas, Garland, Fort Worth, Rockwall, Irving, Richardson, Frisco, and McKinney, as well as in the broader counties of Dallas, Denton, Rockwall, Collin, Tarrant, and Grayson. Contact us at 214.692.8200 or complete our online form to schedule a confidential consultation.