Executive Summary
Equity is often a top-five asset in tech divorces—and one of the most operationally complex. Unlike a bank account, RSUs and options have vesting, forfeiture, blackout periods, and tax withholding that do not neatly split down the middle.
Our Divorce Equity Split Calculator shows arithmetic only; this guide frames questions to ask your counsel.
Vested vs Unvested
| Award type | Typical discussion points |
|---|---|
| Vested RSUs | FMV known; liquidity after vest; may be easier to offset or divide |
| Unvested RSUs | Time-rule formulas; risk of forfeiture if employee leaves |
| Options | Exercise cost, expiration, ISO vs NSO, AMT if ISO exercises |
| Private shares | Valuation disputes; transfer restrictions |
Tax and Reporting
Generally, compensation income from RSU vesting remains tied to the employee’s W-2. If a settlement gives the other spouse value, mechanics might include:
- Trust or holding arrangement until sale
- Cash equalization after tax
- True-up provisions if tax rates change
This is not tax advice—structures vary widely.
QDRO Context
Qualified Domestic Relations Orders apply to qualified retirement plans. Many equity incentive plans are not qualified in the ERISA sense—so attorneys use separation agreements and cooperation with the issuer instead of a classic QDRO.
Checklist for Counsel
- Collect every grant notice, vest schedule, and equity admin login.
- Model after-tax value—not just headline share counts.
- Address future rounds, dilution, and lockups if private.
- Plan for post-divorce exercise windows if options expire.
Disclaimer
Family law is state-specific. This article is educational and not legal or tax advice.