Stock Options and Child Support

The family court determined in In re Marriage of Macilwaine when a stock option is considered “available” as income for child support purposes.

FACTUAL BACKGROUND OF THE DISSOLUTION

The parties were married for fourteen years and had four children together. A large part of the father’s compensation consisted of stock options. He asked that the stock options be valued at the time of their sale rather than at the time they could be sold so that he could maximize his profits.

FAMILY LAW TRIAL PROCEEDINGS

The father was a high income earner, but most of his income consisted of stock options. The stock options vested, but he was not able to sell them without prior approval from the management company. The father argued that until the stock options were sold, they should not be counted as income for the purposes of child support. The family law judge agreed and decided that the exercise and sale of the stock options would determine when they would be used to calculate child support. Therefore the father could maximize his profits. The mother appealed the court’s decision.

APPEAL OF THE FAMILY COURT ORDER

The appellate court overturned the family court’s decision. It reasoned that the focus of child support is on the current needs of the children. If the time of sale was the deciding factor, parents may not sell their options. Children would reach the age of 18 without the proper support. In addition, the court is not required to maximize profits for either parent. Once there are no legal restrictions on the ability to sell stock options, the options must be counted as income for the purposes of child support.

DO YOU NEED HELP WITH ISSUES RELATED TO CHILD SUPPORT?

If you need legal advice and are looking for a family law lawyer in Orange County to address a dissolution issue such as child support or any other divorce matter such as legal separation, annulment, custody, spousal support and/or property division, please consider Treviño Law in your divorce attorney search. We are located in Laguna Hills right off Lake Forest exit to both the 405 and 5 freeway.

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Treviño Law, Inc.
23151 Moulton Parkway
Laguna Hills, California
Phone (949) 716-2102
Visit us at
www.LawintheOC.com

Although the posting of this information can be considered free legal advice for a divorce in Orange County, it does not guarantee that there are other facts which may play a significant part in a dissolution. Circumstances in a divorce case may alter the required action and analysis taken by a family law attorney in California.

Please note that this legal advice does not establish a family law attorney-client relationship. This is a legal advertisement for Treviño Law, Inc.
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