How Do Divorce Courts Typically Determine The Value Of Stock Options?
The valuation of stock options is generally determined by the basic equation that is given in the option agreement between the spouse who has them and the company that he works for. Depending on the terms of the stock option agreement, courts use differing approaches to calculate the value of stock options in the event of a divorce: • Agreements containing a formula for determining the value of the stock options: In these cases, the value will be the difference between the price at which the stock could be purchased by exercising the option and the market value of the stock as of the date on which the option is exercisable. Depending on your state, the market value of the stock will either be its price on the date of the trial or its price as of the time of the divorce decree. • Agreements not containing a formula: States also differ on how to determine the value of the stock when there is no formula expressed. Some states will find that the value of a stock option is determinable from
