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In Maryland, stock
options granted during the marriage are considered marital property
subject to equitable division upon divorce, regardless of whether they
are vested or non-vested.
A stock option is a contractual right to purchase company stock for a
specific price at a specific time.
Upon divorce, the Court can divide stock options between spouses under a
formula where the options are divided “if, as and when” they are
exercised by the employee spouse. However, the Court cannot require the
employee to ever exercise the options. The Court can alternatively value
the stock options and grant a monetary award to the non-employee spouse
to adjust the parties’ equities in property ownership.
Division of stock options in divorce is a complex and growing area of
family law, often requiring expert analysis on valuation and tax
impacts.
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