If you’ve decided to split from your marriage partner and get a divorce in New Jersey, you’ll need to follow a specific legal process. However, when you’re divorcing a millionaire, it’s also essential to understand the financial ramifications involved with your decision. Understanding your options can be critical in maintaining your lifestyle after your divorce is finalized.
Learning about stock options is important when divorcing a millionaire
If your partner is a millionaire who works for a large corporation, they may receive stock options to incentivize them to boost the company’s profits. If the company performs well financially, the value of the stock will likely rise and make the stock options worth even more. They can be used in the future to purchase shares at the grant price, which is based on the stock price on the day they were granted.
Taxes must be considered
Examining the financial impact created by taxes must also be completed when divorcing a millionaire. In some situations, the tax consequences of exercising stock options can be upwards of 40 percent. During divorce negotiations, keeping this in mind is vital to ensure your assets are divided fairly.
Restricted stock awards
During a divorce with high asset values, other financial assets to consider include restricted stock awards and units. Understanding their restrictions and the tax consequences of selling them can help safeguard you from making a significant mistake when your assets are split.
Pay attention to vesting schedules
Restricted stock awards and stock options have vesting periods. Exercising them can’t be done until specific rules are met. The different types of vesting schedules available are essential to understand. This action ensures that your settlement agreement is completed in your best interest.
Examining assets related to other compensation, taxes and the rules and regulations binding them can be critical for the divorce process. This action may mean the difference between keeping or losing a significant amount of value.