Equity compensation adds real complexity to a divorce settlement — timing, vesting, and valuation all shape how awards get divided. Use this checklist alongside the client's attorney, not in place of one.
Characterize the awards
Determine which grants were awarded before the marriage, during it, and after separation
Identify whether each grant compensates past service (often marital) or future service (often separate) — this varies by state
Confirm the state's approach to dividing unvested equity, since time-rule or coverture formulas are common
Value the position
Obtain current values for all vested and unvested awards
For options, confirm strike prices and apply an appropriate valuation method where no public market price exists
Account for illiquidity and transfer restrictions in the valuation
Plan the division and transfer
Confirm whether the plan document even permits transferring awards to a former spouse
If transfer isn't permitted, model an offsetting-asset or deferred-distribution approach instead
Address who's responsible for tax withholding on future vesting and exercise events
Update beneficiary designations and estate documents once the divorce is final
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