How Will My Stock Options Be Divided Upon Divorce in Texas?

The division of stock options can be a tricky process, and is often largely dependent on the facts of a particular situation. In order to get a clear sense of what the division of a stock option might look like, you should have your attorney carefully review the specific terms of the option agreement in question. It is also important to note whether the stock option was offered as part of a compensation package to the specific employee in question, or if it is available as a benefit to all (or most) employees at the company.

Broadly speaking, however, a stock option which was received during the course of a marriage will be counted as community property. Even if they are not fully vested at the time of divorce, some portion of the asset can be claimed and awarded to the non-employee spouse (similar to the discussion above regarding RSUs – see Section 3.007 of the Texas Family Code). If the options were awarded prior to marriage, but were contingent on the employee remaining employed during part or all of the marriage, then those stock options would also be considered community property in a divorce proceeding. The degree to which the options “touch” the marriage (the timing of issuance and the reliance on work performed during the marriage) will is the guiding factor in determining whether, and to what extent, stock options are treated as community property.
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