What Happens to Stock Options in a Divorce?

 Posted on September 15, 2026 in Property Division

Furniture and bank accounts are not the only things that get divided between spouses in an Illinois divorce. Stock options can also be part of the property division, depending on when and why they were granted.

A Bloomingdale, IL asset division lawyer can walk you through the possibilities for your stock options in your 2026 divorce.

Are Stock Options Considered Marital Property in Illinois?

Stock options granted to either spouse after the marriage began are presumed to be marital property (750 ILCS 5/503(b)(3)). This presumption applies even if the options haven't vested yet.

Options granted before the marriage are usually non-marital property. The same can be true of options received as a gift or through inheritance.

If marital funds are used to exercise non-marital options, the court will also need to consider how that money affects the property division.

How Do Courts Divide Unvested Stock Options in an Illinois Divorce?

Unvested options can complicate things. Because they have not vested yet, you don't yet own them outright, so dividing them isn't as simple as splitting a bank account.

For unvested options, courts often look at why the options were granted, the vesting schedule, and how long it will be before they can be exercised. A grant can reward past or current work, encourage future work, or do both. These factors help the court decide how to divide the options between the spouses. The actual division can take place later if needed.

Judges may apply a time-based formula for options that vest after the divorce. This formula compares how long you worked while married to the total time before vesting. The longer you were married while earning toward the grant, the larger the marital share tends to be.

Illinois divorces can involve several forms of equity compensation, including:

• Incentive and non-qualified stock options

• Restricted stock units (RSUs)

• Employee stock purchase plan (ESPP) shares

• Stock appreciation rights

Each of these has specific rules and valuation methods that can affect the final division.

How Do Illinois Courts Determine the Value of Stock Options?

One way to estimate the value of vested options is to compare the current stock price with the price the employee would pay to buy the shares, called the strike price. Other factors can also affect the value. Unvested options or options that are hard to sell can be harder to value. Financial experts sometimes use more complex methods, such as the Black-Scholes model. This formula looks at how much the stock price changes and how much time is left before the option expires.

Because valuation can get complicated quickly, many high-asset divorces bring in a financial professional. Someone experienced in valuing stock options and other company benefits can help make sure the numbers are reasonable before the court considers them.

Do Non-Compete or Vesting Restrictions Change How Options Are Divided in an Illinois Divorce?

Some stock option grants come with strings attached. Examples include a non-compete clause or a requirement that you stay with the company for a set number of years. These restrictions don't automatically remove the options from the marital estate. They can, however, make direct division of the options impractical. Many plans don't allow options to be transferred to a former spouse.

In cases like this, the employee spouse often keeps the options. The other spouse may receive an equivalent value in cash or other marital property instead. A divorce decree can also indicate how the options will be handled once any restrictions lift.

Before agreeing to an offset in value, it's worth thinking through the tax consequences of specific assets. Exercising or selling stock options can sometimes trigger a tax bill, as can incorrect division of retirement accounts.

Call a Plainfield, IL High-Asset Divorce Lawyer Today

Stock options and other equity compensation can be some of the most valuable, and most complicated, assets in a divorce.

The two lawyers at The Law Offices of Robert F. Kramer, Ltd. bring over 40 years of combined experience, including substantial trial and appellate work, to complex asset cases. Our Bloomingdale, IL asset division attorneys will guide you through the division of your equity and work to have it accounted for fairly.

Call 630-785-2400 today to schedule your free 30-minute initial consultation.