On the Space Coast, equity compensation is everywhere. Aerospace and defense employers, tech contractors, and publicly traded companies across Brevard County pay engineers, managers, and executives in stock options, restricted stock units (RSUs), and employee stock purchase plans alongside salary. In a divorce, these awards raise questions ordinary paychecks never do: Which grants are marital? How do you value something that has not vested? And how do you divide an asset the employee cannot transfer? The Law Office of John Vernon Moore, P.A. brings over 89 years of combined experience to untangling equity compensation in Florida divorces.
Equity Compensation 101: Options, RSUs, and ESPPs
A stock option is the right to buy company stock at a fixed strike price after a vesting period — valuable only if the stock trades above the strike. An RSU is a promise of actual shares (or their cash value) delivered on vesting — valuable at any stock price, taxed as ordinary income when it vests. An ESPP lets employees buy discounted shares through payroll deductions. Each has its own vesting schedule, tax treatment, and — critically for divorce — its own reason for having been granted: rewarding past work, encouraging future retention, or both.
Which Grants Are Marital Property?
Florida’s cut-off rules under § 61.075 make timing decisive. Shares and options that vested during the marriage are straightforwardly marital. The hard cases are grants made during the marriage that vest after the petition filing date. Florida courts look at what the award compensates: equity granted for work already performed during the marriage is marital even if it vests later, while equity granted primarily to secure future, post-filing services is nonmarital. Many awards do both, and courts apportion them — commonly with a time-rule (coverture) fraction that credits the marriage for the portion of the grant-to-vesting period that fell before the cut-off date. Grant letters, plan documents, and even the employer’s stated purpose for the award become evidence. Our marital vs. nonmarital property page explains the general classification framework these cases build on.
The Valuation Problem: Worth What, and When?
Unvested equity is a moving target. The stock price changes daily; vesting may never occur if the employee quits or is laid off; and options carry optionality value beyond their current in-the-money amount. Valuation approaches include intrinsic value (today’s price minus strike), Black-Scholes modeling for options, and simple wait-and-see. Because a lump-sum valuation forces someone to absorb all the market risk, many Brevard County settlements avoid valuing unvested awards at all and instead divide them if, as, and when they vest — the deferred distribution approach discussed next.
How Unvested Equity Actually Gets Divided
Most plans prohibit transferring options or unvested RSUs to a former spouse. The workhorse solution is a constructive trust arrangement: the employee spouse holds the former spouse’s share of each award and, as it vests (or is exercised), delivers the net after-tax value. A well-drafted agreement specifies the exact grants and share counts covered, the formula for the marital fraction of each future vesting tranche, tax withholding mechanics so the employee is not taxed on money the ex receives, deadlines for notice and payment after each vesting date, and annual proof — typically the brokerage and plan statements — so the former spouse can verify nothing was missed. The alternative is an offset: the employee keeps all equity and the other spouse takes additional assets now. Offsets are clean but require discounting unvested awards for risk and taxes, which is a negotiation in itself.
Disclosure, Discovery, and the Grants Nobody Mentioned
Equity compensation is a classic under-disclosed asset — not always by malice; employees genuinely forget old grants. Mandatory disclosure captures pay stubs and tax returns, but the full picture requires plan-level records: grant agreements, vesting schedules, and brokerage statements from the equity administrator (Fidelity, Schwab, E*TRADE, Shareworks). Tax return clues — Code V in Box 12 of a W-2, Form 3921/3922 filings — reveal exercises and purchases. Where grants seem to be missing, targeted discovery to the employer resolves it. Equity issues also feed the support side: vested RSU income counts toward child support and alimony income, and double-counting the same shares as both property and income must be guarded against.
My spouse’s RSUs vest next year. Do I get part of them?
If the grant compensated work performed during the marriage, a portion is likely marital even though vesting comes later. The marital share is usually computed with a time-based fraction and paid to you when the shares actually vest.
How are taxes handled when my share vests?
RSU vesting is taxed to the employee at ordinary income rates. Properly drafted agreements divide the net after-tax value, so the employee spouse is compensated for the withholding attributable to your share — otherwise one side quietly pays the other’s taxes.
Can the company just transfer my share of the options to me?
Almost never — most plans bar transfers to former spouses, and incentive stock options lose their tax status if transferred. The standard solution is the employee holding and exercising your share for your benefit under court-ordered trust obligations.
What if my spouse quits before the awards vest?
Unvested awards are usually forfeited on departure, and your share goes with them — one of the real risks of the if-as-and-when approach. Settlements can address bad-faith forfeiture, and an offset today avoids the risk entirely at the price of a discount.
Get Equity Compensation Counted — and Divided Correctly
Equity awards are too valuable to gloss over and too complex for form agreements. The Law Office of John Vernon Moore, P.A. represents engineers, executives, and their spouses across Melbourne, Viera, Palm Bay, and Titusville in divorces where stock compensation is on the table. Call (321) 529-7777 or schedule a consultation before any award vests, is exercised, or expires.