While property such as homes or income are often the first things that come to mind when dividing assets in a divorce, any assets owned jointly by both spouses are subject to division, including stocks. However, unlike some other forms of property, determining the value of stocks and how to divide them can be complex.
In the context of divorce proceedings in Texas, all property owned jointly by spouses or by either spouse is categorized as either community or separate property. Separate property refers to assets that belong exclusively to one spouse, such as property acquired prior to the marriage, property designated as separate in a prenuptial or postnuptial agreement, or property received as a gift or inheritance by one spouse. On the other hand, any property that is acquired by either spouse during the marriage and not classified as separate property is presumed to be community property. In some cases, a property may have characteristics of both separate and community property. Assets categorized as community property are subject to equitable distribution, meaning that they may be divided in a manner the court deems fair.
Acquiring stocks can be done by either purchasing them or being granted them as a form of compensation. If the stocks were purchased by both spouses during their marriage, they are generally considered community property. Conversely, stocks bought by a spouse before the marriage would most likely remain separate property. However, assessing the status of restricted stocks that are granted as a part of a compensation scheme can be complex.
To accurately determine the status of restricted stocks, it is essential to obtain copies of the restricted stock benefit plan from the employer that granted the stock, the letter granting the stocks, and the vesting schedule for the stocks. Key details that must be ascertained are when the stock was granted, the number of shares granted, and the vesting date.
If you or your spouse hold stock options and are contemplating a divorce, it is advisable to consult an experienced divorce attorney for guidance on how the court might assess and divide the stocks.
It is recommended to seek the advice of an attorney to discuss the distribution of your property, including how stocks may be divided. The dedicated divorce lawyers at Wilson Whitaker Rynell have the expertise to assist you in pursuing a favorable outcome. Our firm represents clients in divorce cases in various Texas cities, including Dallas, Austin, Houston, Fort Worth, and all cities within Dallas County, Tarrant County, Collin County, and Denton County.
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**Stocks and bonds,** like all other assets convertible to cash value, are **divided** under Texas' community property law in a just and right division.
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