Blog

Unvested Stock Rewards in New Jersey Divorce

In a recent case, M.G. v S.M., the New Jersey Appellate Division decided in favor of the plaintiff husband.  The issue was whether or not a restricted stock award from the husband’s employer, which vested after the filing of a Complaint for Divorce, was subject to equitable distribution.  The trial court found that the wife was entitled to 50% of all of these stock awards.

The Appellate Court reversed and found that a portion of the restricted stock award was not subject to equitable distribution. This was because this particular award is based upon future performance – after the marriage ended.  Another consideration was that much of the award was not fully vested until after the divorce complaint was filed. 

The Court did rule that unvested stock awards would generally be subject to equitable distribution unless one of the parties can prove that such awards are based upon post-marriage, future performance.  In other words, stock awards should be considered a marital asset if they are based on past performance, efforts during the marriage, or part of a deferred compensation program. 

The vesting issue is a little more murky.  Judge Mawla, writing for the majority, acknowledged that there had been little guidance for the trial judge.  Therefore, he sent the case back to the trial court for further proceedings suggesting factors in the New Jersey equitable distribution statute to be considered.  I will update you with the trial court’s findings on this issue.

When it comes to marital assets and equitable distribution in New Jersey, things can get a bit complicated.  This case is just on example of the potential complications.  It is important to have a full understanding of your and your spouse’s compensation package.  Equally important is to keep compensation plan documents.

If you have any questions about this post contact me at jlawrence@lawlawfirm.com.

Subscribe to Our Blog

SHARE THIS POST:

Related Posts

Blog
Rising Divorce Rates During the Coronavirus Crisis

There are reports about how quarantined married couples are the cause of rising divorce rates during the coronavirus crisis. Family law attorneys are talking about it and there are plenty of jokes and memes circulating on the internet. I do not find it funny. I feel for those struggling and in pain in their marriage…

Read More
Blog
What is the Cost of a Divorce in New Jersey?

A recent analysis was published regarding the cost of a divorce in New Jersey. According to the study, the average cost of a divorce without children totals $15,600 and with children, the cost increases to $23,400. One of the first questions I am asked during an initial consultation is how much the divorce process will…

Read More
Blog
Marriage Rate is on the Rise in New Jersey

Recently, while driving into work, I heard a story on the radio.  The story discussed a report that the marriage rate is on the rise in New Jersey. It stated that marriage rates in New Jersey have increased by 8% over the last 10 years but that divorce rates have remained the same. New Jersey…

Read More
Blog
Is January Really “Divorce Month?”

“Divorce Month” Fact or Fiction: Do More Couples Split in January? was a recent article that I came across in the New York Times. The article discusses the belief that January is the busiest month of the year for divorce filings. The article’s information is consistent with my experiences after practicing family law for many…

Read More
Blog
Divorce Consultations – Are You Prepared?

I spend a significant of my day providing initial divorce consultations. This is the most important time I will spend with a potential client. In these consultations, many of the people that come see me are understandably emotional and focused on the part of the relationship that led them to my office. More often than…

Read More
Blog
Divorce Issues for New Jersey and Federal Government Officials

For many of us, the first time that we heard of family issues affecting government officials started with the philandering of President Clinton. These days, the media feeds us the personal and private affairs of former Congresswoman Katie Hill and former FBI lawyer, Lisa Page, among others. Going through a divorce is a stressful time…

Read More
Call Now ButtonCall Us