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
How New Jersey Courts are Handling Litigation

COVID-19 Brings Changes to Litigation in New Jersey  The COVID-19 pandemic has changed many aspects of life in New Jersey, and the courtroom and litigation processes are no exceptions. If you are considering a divorce, you may wonder how the pandemic might affect the scheduling and process of your case. Some of the changes that…

Read More
Blog
Changes to New Jersey Court Proceedings

COVID-19 Brings Changes to Litigation in New Jersey The COVID-19 pandemic has changed many aspects of life in New Jersey, and the courtroom and litigation processes are no exceptions. If you are considering a divorce, you may wonder how the pandemic might affect the scheduling and process of your case. Some of the changes that…

Read More
Blog
The Causes of the Rising Gray Divorce Rate

Why Gray Divorces Are on the Rise While the overall divorce rate in the United States has fallen, the divorce rate among Americans ages 50 and older has doubled since 1995. Although some of this can be attributed to financial factors, there are a number of other reasons for the rise in what are called…

Read More
Blog
The Division of Retirement Assets in a New Jersey Divorce

How Retirement Accounts Are Divided in a Divorce By the time that many people reach the age of 55, they have a retirement account with a balance of more than $100,000. Some retirement accounts may be far larger. This can present complicated issues during the divorce process as assets must be equitably divided between the…

Read More
Blog
Your First Visit to Your Divorce Attorney

What Happens When You First Meet Your Divorce Attorney The majority of people who are facing the end of their marriage will want to have a lawyer’s assistance. A lawyer is your guide to the divorce process and your advocate who is there to counsel you and to fight on your behalf. Here is what…

Read More
Blog
Divorce Grounds in New Jersey

Legal Grounds for Divorce in New Jersey A little-known statistic is that New Jersey has some of the lowest divorce rates in the country, according to the 2019 American Community Survey performed by the U.S. Census Bureau. However, there are plenty of individuals in the state who are still thinking about ending their marriages. There…

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