Stock Options
ARIZONA: Brebaugh v. Deane, ___ Ariz. ___, 118 P.3d 43 (Ct. App. 2005)
The trial court erred in holding that unvested stock options given to the husband shortly before the divorce were entirely community property. Unvested stock options are classified in the same manner as unvested pensions, and the record showed that the options were at least partly consideration for future services to be rendered after the date of classification. Thus, the options were at least partly separate property.
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FLORIDA: Ruberg v. Ruberg, 858 So. 2d 1147 (Fla. Dist. Ct. App. 2003).
Unvested stock options are marital property to the extent that they are consideration for marital efforts, and nonmarital property to the extent that they are consideration for postdivorce efforts. On the facts, where the options vested in monthly amounts and were granted to encourage future employee performance, they were primarily compensation for postdivorce efforts, and they were properly treated as nonmarital property.
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NORTH CAROLINA: Ubertaccio v. Ubertaccio, ____ N.C. App. ____, 588 S.E.2d 905 (2003).
Under an employment agreement signed during the marriage as consideration for past services, the wife was eligible for awards of stock. But no awards were made until after the date of classification. A three-judge panel wrote three different opinions, ultimately affirming the trial court's finding that the stock was completely subject to division upon divorce.
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MISSOURI: Clance v. Clance, 127 S.W.3d 716 (Mo. Ct. App. 2004).
The classification of stock options depends upon the time at which the options were earned. Depending upon the facts, stock options can be consideration for past, present, or future service. On the facts presented, stock options awarded to the husband one day after entry of the divorce decree were consideration for past marital efforts. They were nevertheless separate property because the husband did not own the options on the date of the divorce, which is the date of classification under Missouri law.
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CONNECTICUT: Gilbert v. Gilbert, 73 Conn. App. 473, 808 A.2d 688 (2002).
The trial court did not err by treating the husband's unmatured stock options as marital property.
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