Complex Assets
When couples in California end a marriage, the usual tug‑of‑war over the house or the checking account is only part of the story. Increasingly, the real money is tied up in equity and incentive pay—stock options that will not vest until next year, quarterly performance bonuses, restricted stock units (RSUs) promised five years down the road. If you or your spouse works in tech, finance, or any field that rewards talent with shares rather than cash, dividing stocks and bonuses in divorce in California can feel like splitting a pie while it is still in the oven.
California’s community‑property rules say that everything earned between the wedding and the date of separation belongs to both spouses, usually 50/50. That sounds simple, until you look at equity compensation that vests over time.
It should be noted, however, that a premarital or marital agreement can also influence how equity compensation is classified, overriding default community property rules in some cases.
Clients often assume that every share must be cut straight down the middle, but California judges rarely treat unvested RSUs or performance stock units (PSUs) that way. If a grant covers 48 months and the couple separates after 30, only 30/48 (or about 62 percent) goes into the marital pot. The remaining 38 percent belongs to the employee‑spouse alone. That can translate into hundreds of thousands of dollars either way.
“I can keep my equity if I waive interest in the house.” You might, but you need parallel valuations. Swapping a volatile stock grant for a stable real‑estate asset can backfire if share prices spike later.
Bonuses sound straightforward—cash earned, cash split—but timing matters. A sales bonus announced in December but paid in February is typically still community income if the bulk of the work was done before separation. Courts often examine offer letters, payroll records, and even email announcements to decide. Deferred compensation plans create another wrinkle. Because payouts happen years later, experts discount future dollars to present value and then apply the community percentage.
We help professionals and spouses navigate the complex world of stock options, bonuses, and equity division in California divorces. From unvested RSUs to performance-based pay, we’ll help you get what you’ve earned.
Marketable stocks can be priced with yesterday’s closing quote. Options, RSUs, and PSUs require a deeper dive:
Courts accept these models when both sides rely on credentialed experts and transparent assumptions.
A 50/50 split on paper can be anything but equal after the IRS weighs in. Restricted stock units are taxed as ordinary income when they vest; long‑held options exercised later may trigger capital‑gains treatment. If one spouse keeps most of the equity, that spouse also inherits the future tax bill. Smart settlements credit the non‑employee spouse for those deferred taxes, or they structure transfers under IRC §1041 so that the receiving spouse takes on the tax at vesting.
When dividing financial perks in a divorce, start by carefully inventorying all assets, including grant dates, vesting schedules, strike prices, and performance hurdles. It’s important to apply the time rule to determine the community property portion instead of assuming a simple 50/50 split. Working with the right experts, such as a family law attorney, valuation specialist, and sometimes a tax adviser, can provide the expertise needed for accurate valuation and legal guidance. Couples can also negotiate creatively, offsetting unequal equity splits with cash, real estate, or a larger share of retirement accounts to reach a balanced and fair settlement.
Executive compensation sheets are written for retention, not for divorce court. Missing a vesting cliff or a performance trigger can leave money on the table. Whiting, Ross, Abel & Campbell works with credentialed valuation specialists to translate grant agreements into plain English, protect separate-property claims, and structure settlements that stand up to later scrutiny.
Dividing stocks and bonuses in a California divorce requires both careful calculation and thoughtful strategy. Accurate records, expert valuations, and a clear understanding of the time rule are essential to ensure each spouse receives a fair share that truly reflects their marital contributions.
If you’re facing the challenge of dividing equity compensation or bonuses in divorce, don’t go it alone. Reach out to our experienced attorneys for clear advice and effective representation that protects your financial interests.
Yes, if they were earned during the marriage, they’re generally treated as community property and subject to division.
Bonuses are typically split based on when they were earned. If tied to work performed during the marriage, they’re usually considered community property, even if paid after separation.
Most likely, yes. RSUs granted or vested during the marriage are usually considered community property and may need to be divided according to California law.
Noticing sudden spending or disappearing funds during divorce? You might be dealing with dissipation. In California, if one spouse deliberately wastes or hides marital assets before property division, it can seriously impact the final outcome. Knowing how to identify and respond to dissipation is key to protecting what’s rightfully yours.
Divorce may change your relationship status, but unless you update your estate plan, your ex could still be first in line for your assets. Too often, newly divorced individuals forget to revise wills, beneficiary designations, and trusts—leaving the door open to legal disputes and unintended inheritances. In California, where community property laws complicate things further, keeping your estate plan current is essential to protecting your legacy.
Remarriage doesn’t erase the past—especially when it comes to spousal or child support. Whether you’re the one getting remarried or your ex is, ongoing support obligations can get complicated fast. Understanding how remarriage affects your legal responsibilities (or rights) is key to avoiding surprises, protecting your finances, and ensuring your family’s needs are met.
The website is designed for general information only. The information presented at this site should not be construed to be legal advice or the formation of a lawyer/client relationship. Portions of this website may include what some states might consider to be attorney advertising. Do not provide any confidential information to Whiting, Ross, Abel & Campbell, LLP through this site. If you need legal advice, you should seek professional assistance from a licensed lawyer in your jurisdiction. Whiting, Ross, Abel & Campbell, LLP is in Walnut Creek, California, and our attorneys are licensed to practice in the State of California.
This privacy notice discloses the privacy practices for Whiting, Ross, Abel & Campbell, LLP relating to information collected on this website.
When you use this website, Whiting, Ross, Abel & Campbell, LLP will collect the personal information you provide to us whether it is by you contacting us by e-mail or otherwise. Whiting, Ross, Abel & Campbell, LLP will not share your information with any third parties. Unless you ask us not to, we may contact you via the contact information you provide to tell you about information regarding the firm or the firm’s practice areas, as well as to tell you about changes to the privacy policy.
If you would not like to be contacted, or if you would like to make changes to the information you provide us through the website, you may contact us directly at 925-296-6000. If there are any material changes to our privacy policy, they will be posted on this website.
This Privacy Policy is effective as of January 1, 2016.