Dividing Restricted Stock Units in a New Jersey Divorce

Sometimes, employees of a large company receive compensation packages that include more than their regular salary. This may include a means of additional compensation to promote good performance overtime, such as restricted stock units (RSUs). When a person is going through a divorce, they may wonder if their RSU is subject to equitable distribution. 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?

The New Jersey Appellate court recently determined how assets such as RSus should be handled in a divorce. In a case regarding whether stock options granted during a marriage but not exercisable until after the divorce are subject to equitable distribution, the court ruled a “future performance” of an RSU is not considered marital property. This means it would not be subject to equitable distribution and would not be divided, as most of the award would not be fully vested until after the marriage was over. 

However, it is important to note that the Appellate court did establish situations in which stock options can be divided. This can include 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?

It is important for those with stock options going through a divorce to protect their assets. It is because of this that a skilled divorce attorney should be retained to prepare 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

We understand that those getting a divorce most likely have several questions regarding the weeks and months to come. Paris P. Eliades Law Firm, LLC is honored to serve the people of New Jersey, including Sparta, Sussex County, Morris County, Passaic County, and Bergen County with the quality legal services they deserve. If you are getting a divorce or have any other questions regarding divorce-related matters, please do not hesitate to contact our firm for a consultation today.