# Splitting shares that have not vested



## Goodbye (May 16, 2021)

I'm yet to start mediation soon and it's likely the mediator would know the answer to this but I'm interested in what others have done in this situation.

Aside from our home, bank accounts, cars and pension, we own shares... Or I should say my husband does because they are in his name. His job has always paid him in part shares, part bank transfer. Those shares often take some time to vest so not all of it is immediately available for withdrawal. 

For the shares that have not yet vested and will vest within the next say 3 years, do those form part of the joint income to be split in the divorce settlement and how does that work if divorcing now?

As they are in his name, I don't have access to determine what proportion are yet to vest or how much they are worth. I only know how many shares altogether based on a text he sent me a couple of years ago when we were considering a big purchase which we didn't make in the end. 

Thanks for your insights.


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## Beach123 (Dec 6, 2017)

I’d check with an attorney. He needs to prove what he has. They may do an assumed value when it’s vested…then he may have to pay you half that amount.
But I’m sure it depends if you are in a community property state.


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## Goodbye (May 16, 2021)

Thank you, beach 123.
I should've mentioned that I'm in the UK. I've not heard the term community property before. And I'll get advice from an attorney and mediator.
I wondered what others ended up doing if they've been in, or handled/witnessed this situation before.


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## Cooper (Apr 18, 2008)

Everything thing in a divorce is negotiable so you need to determine what is important to you.

Shares of stock are very complicated because today's value may be very different than the value next week or ten years from now. Their value could grow but could also become worthless, and really it's just paper until it's sold.

In my case I offered my stbx a right now payout of 50% of cost value as opposed to any future payout. Or the option of 50% current market value at the time of sale as long as shares increased in value, if the stock diminished in value she would receive 50% of its reduced value, or nothing if the company folded. She took the cash now option which was the least risky option.


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## Goodbye (May 16, 2021)

Cooper said:


> Everything thing in a divorce is negotiable so you need to determine what is important to you.
> 
> Shares of stock are very complicated because today's value may be very different than the value next week or ten years from now. Their value could grow but could also become worthless, and really it's just paper until it's sold.
> 
> In my case I offered my stbx a right now payout of 50% of cost value as opposed to any future payout. Or the option of 50% current market value at the time of sale as long as shares increased in value, if the stock diminished in value she would receive 50% of its reduced value, or nothing if the company folded. She took the cash now option which was the least risky option.


I see. Thanks for that insight. That must've left you out of pocket initially, since the shares hadn't vested yet? You were able to find the cash to give her. I would've opted for cash now also, as that takes away the need to keep in touch in future about further financial matters. Clean break.


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## Married but Happy (Aug 13, 2013)

The shares have a future value, but ONLY if he stays with the company long enough for them to be fully vested. If he leaves, he loses them. Is there a chance he'd leave, or the company fold? IMO - which is not a legal opinion - you should only be compensated for those shares if and when they vest in the future, not presently.


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## Goodbye (May 16, 2021)

Married but Happy said:


> The shares have a future value, but ONLY if he stays with the company long enough for them to be fully vested. If he leaves, he loses them. Is there a chance he'd leave, or the company fold? IMO - which is not a legal opinion - you should only be compensated for those shares if and when they vest in the future, not presently.


Good point, yes the motive of the company is to retain loyalty of the employees. It's a well established multinational tech so unlikely to fold within the next 3 years but of course with the current state of the world economy, anything can happen.
He could argue that giving me a share of the current value could unfairly compel him to remain there but so far, for the two times he's changed jobs over the last 25 years or so, he's negotiated compensation from the new employer for those shares that hadn't vested by the time of his resignation from the old employer.


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## ccpowerslave (Nov 21, 2020)

I’m interested to hear this one. A share that isn’t vested has a value of zero because it isn’t a guarantee of anything other that you will get that share at a later time at current market provided you’re still there. If someone tried to get me to pay them for that, I’d quit. Then there are zero shares and nothing to collect. So I would guess they’re worth nothing, but I’m sure someone here knows the answer.

UK is a bit different in the US with their labor laws.


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## Goodbye (May 16, 2021)

ccpowerslave said:


> I’m interested to hear this one. A share that isn’t vested has a value of zero because it isn’t a guarantee of anything other that you will get that share at a later time at current market provided you’re still there. If someone tried to get me to pay them for that, I’d quit. Then there are zero shares and nothing to collect. So I would guess they’re worth nothing, but I’m sure someone here knows the answer.
> 
> UK is a bit different in the US with their labor laws.


You'd quit and deprive yourself of potentially half your allocation? Wouldn't that be cutting off your nose?


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## Cooper (Apr 18, 2008)

Goodbye said:


> I see. Thanks for that insight. That must've left you out of pocket initially, since the shares hadn't vested yet? You were able to find the cash to give her. I would've opted for cash now also, as that takes away the need to keep in touch in future about further financial matters. Clean break.


What I did is give her a larger chunk of the marital assetts and made up the difference in cash when I bought out her equity in our home. Fortunantly for me it worked out to my benefit as the shares steadily increased in value until we sold the business.

As CC said shares really have no value until fully vested and sold. Also if there's no contractual stipulation a business may not have to cash out a shareholder if they leave the business or simply want the money. My shares had a ten year non liquidity clause or a 40% reduced value if I left the business.

If your husband received the shares during the marriage they should be considered a marital asset so you should try to negotiate some sort of settlement. I also think he is within his rights to say "no" to any payout until the shares are sold, you wouldn't benefit to any increase in value, you would get 50% of the value at time of divorce, or possibly nothing if the company crashed.

As I said earlier, everything is negotiable.


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## Goodbye (May 16, 2021)

Cooper said:


> What I did is give her a larger chunk of the marital assetts and made up the difference in cash when I bought out her equity in our home. Fortunantly for me it worked out to my benefit as the shares steadily increased in value until we sold the business.
> 
> As CC said shares really have no value until fully vested and sold. Also if there's no contractual stipulation a business may not have to cash out a shareholder if they leave the business or simply want the money. My shares had a ten year non liquidity clause or a 40% reduced value if I left the business.
> 
> ...


Sounds like you were flexible and open to considering the options..... and you don't sound bitter (or at least I don't get the impression you came to that decision begrudgingly at the time). I'm glad your shares did so well.


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## Cooper (Apr 18, 2008)

Goodbye said:


> Sounds like you were flexible and open to considering the options..... and you don't sound bitter (or at least I don't get the impression you came to that decision begrudgingly at the time). I'm glad your shares did so well.


I had plenty of reasons to be bitter but emotions have no place in a divorce. The more you spite and try to hurt each other the more money you lose to the legal system, best to get it over with as quickly as possible in my book. Good luck to you.


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## Goodbye (May 16, 2021)

Cooper said:


> I had plenty of reasons to be bitter but emotions have no place in a divorce. The more you spite and try to hurt each other the more money you lose to the legal system, best to get it over with as quickly as possible in my book. Good luck to you.


Thank you.


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## Deejo (May 20, 2008)

I second the option of offering an alternative solution, rather than making the stocks themselves a point of contention. My call would be something concrete of value to you, with existing assets rather than wondering about assets that aren't yet tangible. Although, they do certainly have a value, which he would be required to disclose here in the states.


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