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
Considerations for the Blended Family

More than half of the families in the United States were formed by remarriages or recoupling of relationships. Based on current statistics, half of all marriages in the United States end in divorce.  And, the average length of a marriage is seven years. With the ending of marriages, the subsequent remarriages or the forming of…

Read More
Blog
An Emotionally Healthy Divorce in New Jersey

One of my hardest jobs as a divorce lawyer is managing an angry and bitter client. It always troubles me when a client demands that I get them justice or retribution through the divorce process. It is generally a difficult conversation and contrary to every stereotype believed by the client.  Justice is not always, and…

Read More
Blog
Does Valentine’s Day cause divorce?

I recently came across this article Day after Valentine’s kicks off divorce season on CNN’s website. It discusses the increase in people seeking divorce, and in one study, this increase was about 40% during this particular season of love. According to the article, some believe Valentine’s Day triggers spouses to make a move in their marriage. It also mentions several other factors, such…

Read More
Blog
What Records and Documents Should I Gather if I am Considering a Divorce?

If you are considering a divorce in New Jersey, a wise starting point is to inventory your financial records and documents. Here is a list of 14 records you should gather: Social Security Earnings Statement.  This is a snap shot of both parties’ respective income.  The statement shows a clear picture of the earning history…

Read More
Blog
College Contributions in New Jersey Divorce Law

  Divorced parents in New Jersey have an obligation to contribute to their children’s college expenses. On the other hand, married parents in New Jersey do not have the same obligation. The case of Newburgh v. Arrigo provides a list of factors for a court to consider in assessing the obligation of the parents. This…

Read More
Blog
Myths & Facts in New Jersey Divorce Law

  Clients are often misguided as to their rights and obligations in a divorce and, because of this, their expectations are often unrealistic. Often, clients will tell me what they believe the law to be; only for me to have to tell them otherwise. Below are 6 of the the most common misperceptions that I…

Read More
Call Us