“How are unvested stock options, unvested retirement benefits, or a potential inheritance treated by divorce courts?”
They are not. Indiana’s one-pot theory pulls all assets and liabilities brought into the marriage or acquired during the marriage but before the filing of a divorce into the “pot” or marital estate for division.
This gives judges wide discretion to apportion it and reach a just and reasonable division of the marital estate. At Dixon & Moseley, P.C., however, we observe this sweeping definition of and reach to marital assets sometimes creates a false sense of security or expectation.
If a stock or pension is not vested on the date the divorce is filed, but vests the next day, it is not a part of the marital estate.
The reason for this is simple, but nevertheless results in a harsh situation in some marital asset division cases.
A spouse may decease before the vesting, or lose their job, or the company may fold or file bankruptcy (or otherwise become insolvent and unable to honor this contractual obligation). As to an expectation of inheritance, there may be a change of a will or otherwise.
The logic and policy behind this is this is an expectancy that may or may not materialize. Therefore, it is not an asset able to be valued. The contra-veiling argument is if it is worth zero, then you won’t care to give me a proportional share. This is not the law.
Nevertheless, the right expert can discount anything and a Vegas bookie, who takes bets on who will be the next Pope, might let you bet on it. If this is your case, it may be possible to argue for a different division of the marital estate or argue to change the law. Our sister state, Illinois, has included expectancies (unvested assets) in division of the marital estate.
Future benefits may be considered in the marital estate if they are paid for or “earned” during the marriage, based upon recent case law, as this is a developing area.
The divorce attorneys at Dixon & Moseley, P.C., always guide our clients on what the division of marital asset laws are to a statistical certainty, being careful to identify and explain current or future arguments to be made for development in the law. If this is the approach you see, we may be your counsel.
