Legal Question in Family Law in California

Stock Options, Post-Divorce of

In my husband's divorce decree it states that his ex is entitled to half of certain of his stock options. With her agrmt, all options (his and hers) were recently sold and the gross will be considered earnings. He received the net proceeds (gross less costs and taxes withheld). Because the stock options were not transferrable, he sold all with the intention of giving his ex her net share of the proceeds . She is demanding her gross share & will take nothing less. She has filed an OSC and we are to be in court of 11/29. We have a mtg. sched. with an atty. but are doing much of the prep work ourselves. At the request of her atty. we sent a check for $30k (90% of her net share). Our former atty. suggested that we hold back 10% to cover any add'l taxes which may be owed. As far as we know, the check is still at her atty's office. We have since learned that we can give her the net and a 1099 showing the taxes withheld so far. Any remaining taxes (or overpayment) due can be dealt with later. Is this the best/customary way to do it? She refuses and has a CPA backing her up, stating that giving her the gross is the cleanest way to handle this. We did not receive the gross - should she? We'd have to get a loan to do so.


Asked on 11/10/05, 10:09 pm

1 Answer from Attorneys
Lyle Johnson Bedi and Johnson Attorneys at Law

Re: Stock Options, Post-Divorce of

You need to review the document that divides the stock between you husband and his ex. Normally there is a provision that the non owning spouse pays their share of the taxes incurred by the sale of the stock. The parties should share the taxes pro rata to the amount of shares that were sold in their behalf.

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Answered on 11/14/05, 3:07 am


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