In my first article in this series, I explained stock options and restricted stock options as employee benefits. If you have received one of these benefits from your company, you need to consider what will happen to them now that you are filing for a divorce. Another similar factor to consider are restricted stock units (RSU). If you have restricted stock units, you need to know how they work as well as what will happen to them in your divorce.
What are Restricted Stock Units?
Restricted stock units constitute a promise made by the company to an employee. The company promises that in the future, the stock will go to the employee. In most cases, this will happen at no cost to the employee.
However, in some cases, there might be a cost, but it will be very low. All of this happens as long as the employee who receives the stocks meets the vesting requirements. I discussed the vesting period in my previous article, but I can recap what it means here. The vesting period or vesting requirement is the period before the stocks can be owned by the recipient. In most cases, the vesting period is a length of time. In some other situations, the vesting period depends on your achievements within the company. For example, you might obtain the stock when you get a promotion or meet some other milestone with the company.
When the units go through the vesting period, they get converted into stock. This stock then gets released to the employee. At this point, the employer will likely ask that the employee
In some restricted stock unit plans, a provision allows the recipient to wait to receive their stock until some future date. For those who choose to do this, they generally wait to receive the stock until they retire.
Restricted Stock vs. Restricted Stock Units
There are many similarities between restricted stock and restricted stock units. For example, like restricted stock, restricted stock units must go through a vesting period. In addition, the types of vesting requirements are the same. Finally, both restricted stocks and restricted stock units require the recipient to pay taxes when they receive the stock.
However, there are a few differences to note. With restricted stocks, the recipient receives voting rights. This is not the case when it comes to restricted stock units. This happens
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