Your spouse works at a major publicly traded company. You're going through a divorce. And somewhere in their compensation package are restricted stock units or RSUs — awards of shares of company stock that haven't even vested yet.

Are you supposed to receive stock? Are the RSUs considered income? Are they both? How much are we actually talking about here?

By the end of this episode, you're going to understand Restricted Stock Units (RSU) and how they are commonly handled in a divorce so you can be better prepared!

More specifically, we discuss:

• What are Restricted Stock Units (RSUs)?
• Dividing RSUs in a Divorce
• Characterizing RSUs as Income or Assets
• Determining RSU Community Property and Separate Property
• Commonly Used Formulas for Splitting RSUs in California

Key moments:

(00:00) Introduction

(00:59) What are Restricted Stock Units (RSUs)?

(04:37) RSUs vs. Stock Options

(07:02) Understanding Vesting Schedules

(09:14) Companies that Offer RSUs

(11:45) Dividing RSUs in a Divorce

(13:15) Characterizing RSUs as Income or Assets in Divorce

(16:11) Unvested RSUs at Date of Separation (DoS)

(17:36) Determining Community Property and Separate Property for RSUs

(20:32) Commonly Utilized Formulas for RSUs in California Divorces

(27:48) Practical Example: Jim and Rachel Johnson

(33:52) Important Information to Gather Regarding RSUs In The Divorce Process

Resources:

• Access Episode Show Notes and Sign Up for the Retired·ish Newsletter
• Ask Cameron A Question!