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.

Back to Blog
SHARE THIS POST:

Related Posts

Blog
The Advantages of Divorce Mediation

Reasons to Choose Divorce Mediation Over the Alternatives According to some sources, nearly half of all marriages in the U.S. end in divorce. Mediation results in a positive resolution in as many as 80% of all cases. Many divorce lawyers recommend mediation if possible because there are many advantages to this approach, including saving time…

Read More
Blog
Dealing With Taxes During Your Divorce

Planning for the Tax Aspects of a Divorce While divorce can be a challenging experience personally, emotionally and practically, the financial effects are some of the longest-lasting changes. Not only do you need to manage asset division and the resulting change to both parties’ finances, but you may also find it challenging to adjust to…

Read More
Blog
Is a Prenup or a Trust Better Advance Preparation for Divorce?

Prenup or a Trust? – Divorce-Proofing Your Assets When people in New Jersey decide to marry, they may not want to think about divorce. However, with more people marrying later in life, with established careers, as business owners or as parents of children from prior relationships, there are many good reasons to engage in financial…

Read More
Blog
Preparing for the Realities of Divorce

Meeting the Challenges of Divorce Dealing with an unhappy marriage can be painful and difficult. Whether there are severe conflicts or simply a growing apart over time, divorce is always challenging on personal, emotional and financial levels. While spouses in New Jersey know that divorce is a significant undertaking, it can be more difficult than…

Read More
Blog
How Can Divorce Affect Your Medical Practice?

How to Deal With Your Medical Practice in a Divorce New Jersey doctors going through a divorce may have particular concerns about how the end of the marriage will affect the future of their medical practice, especially as any private practice is typically a closely held business. Much like other business owners, physicians may worry…

Read More
Blog
What Documents Do You Need for Your Divorce Legal Consultation?

Documents to Give Your Divorce Attorney If you are considering a divorce in New Jersey, it is important to prepare the documents that you need to share with your family law attorney. While the decision to end a marriage may be deeply personal and emotional at its core, divorce is a legal and financial process…

Read More

Disclaimer and information can be found here, including links to descriptions and selection methodologies. No aspect of this advertisement has been approved by the Supreme Court of New Jersey.
Call Now ButtonCall Us