RSUs and Stock Options in Australian Divorce and Separation Made Clear

How QFLP approaches unvested and vested equity

Unvested grants are often treated as financial resources; vested or exercisable interests are more likely to be treated as property, but the outcome is fact specific.

Unvested employee share options may be regarded as a financial resource, while vested interests tend to be included as property, depending on the scheme’s terms. The Court looks closely at conditions such as performance hurdles, continued employment and forfeiture.

Example: an unvested tranche that lapses on termination typically weighs into adjustments rather than direct division, while a vested option that is unexercised can be valued and offset.
Classification snapshot

Are unvested stock options considered marital assets?

Often no. Courts frequently treat unvested options as a financial resource, not property, given value is contingent on vesting conditions. A bespoke analysis still applies.

How are unexercised yet vested options handled?

They are commonly included in the asset pool, valued at net value after taxes and costs, then offset or transferred if plan rules allow.

Do RSUs that vest over several years complicate division?

Yes. Staggered vesting can justify a deferred percentage approach (for example, sharing future proceeds as they vest) rather than a single up-front offset.

What if the option plan bars transfers to an ex-spouse?

Plans often restrict transfers, so the Court may order an offset or a deferred payment tied to future vesting or exercise instead of direct transfer.

How QFLP values options and RSUs for a fair net value

Valuation focuses on net value after taxes, exercise price, costs and lack of marketability, not headline grant numbers.
For options, intrinsic value equals current share price minus the exercise price; time value may be relevant for near-term events but is often discounted in family law for uncertainty. For RSUs, current value reflects share price times vested units, less applicable tax and sell-down costs.

Example: if options are in-the-money by $10 and 1,000 options are vested, gross value is $10,000; after estimated tax and brokerage, the net value used for settlement may be much lower. Independent experts or forensic accountants are typically engaged when equity is material.

Valuation checklist

• Current value and stock prices at an agreed date
• Exercise price, expiry and trading restrictions
• Tax consequences on exercise and sale
• Lack of marketability and blackout periods

Decision criterion: Would a prudent buyer pay cash today for the interest given restrictions? If not, apply a discount for marketability and risk.

Tax implications QFLP considers before you divide equity

ESS timing and capital gains tax events can change the pool and support payments; orders should account for who pays what and when.
Employee share scheme rules can tax you at grant, vest, or deferred taxing points. On sale, CGT may apply; the combination materially affects the parties’ net outcomes. In some matters, proper tax treatment of ESS interests can change what is available to divide.

Example: a tax-deferred RSU vest may trigger income at vesting and CGT later on sale; settlements should allocate tax burdens and future proceeds clearly.
Common tax touchpoints

Example: Parties agree that when options are exercised the payor spouse reimburses the other for agreed tax on the shared portion, ensuring a fair and accurate split of future proceeds.

Managing international assets and currency risk with QFLP

When assets are located overseas, the plan’s governing law, broker location and currency exposure affect the division and enforcement.
If your employer is overseas, grants may be held in foreign brokerages and settled in USD or another currency. Orders should state how to share international assets across borders, who bears forex costs, and how to manage withholding and reporting.

Example: where the employee is Australia-resident but equity is in a US plan, parties can agree that future proceeds are converted at the transfer date’s FX rate and that brokerage forms are executed promptly to avoid lapses.

Cross-border checklist

• Governing law and transfer rules in the plan
• Managing currency risk and conversion costs
• Evidence of tax residency and withholding certificates

Decision criterion: Can a practical mechanism share net cash after FX, tax and fees within 5 business days of each vest or sale?

Choosing a division method that fits your situation

A strategic approach matches the division method to vesting, volatility and tax, balancing fairness with practicality.
Common models include: an immediate offset (other assets compensate the non-holder now), a deferred percentage of future vesting and sale proceeds, or a trust or escrow with agreed sale windows.

Example: if options are deeply out of the money, an offset now may be inappropriate; instead, a deferred percentage that only applies if options are later in-the-money can ensure a fair settlement without overpaying. The Court’s task remains to achieve an equitable outcome for both parties.

Division models

• Offset now: clean break; use when value is stable.
• Deferred percentage: share future performance; useful for unvested options.
• Escrow or trust: neutral party sells and splits net value.

.Decision criterion: Is price volatility high and value contingent? If yes, prefer a deferred model tied to future performance.

How equity compensation affects spousal support

Equity-based income can influence support payments and capacity to pay, especially in high-net-worth matters.

Support assessments may consider sources of income beyond base salary, including dividends, vesting events or option exercises. Orders should clarify whether support is calculated on cash receipts, realised gains or both.

Example: the payor spouse who routinely sells RSUs post-vest may have higher assessable income for support than a peer who holds long term, so annual true-ups can avoid over- or under-payments.

Practical settings

• Annual disclosure of ESS activity and tax
• True-up mechanism for irregular equity income
• Caps for extraordinary, one-off grants

Decision criterion: Does equity create volatile income? If so, include review dates and caps.

What QFLP needs to prove a fair and accurate outcome

Clear documents let valuers and the Court determine net value and enforce orders without delay.
Bring the plan rules, grant notices, vesting schedules, broker statements, payroll tax records and communications about redundancies or corporate events. Forensic accountants can model scenarios so support payments and property division reflect current value and realistic future performance.

Example: if unexercised options are close to expiry, a tight sale window and pre-signed brokerage forms avoid loss of value.

Document checklist

• ESS or ESOP plan rules and any amendments
• Grant, vesting and performance conditions
• Broker statements and transaction history
• Tax summaries and withholding records

Decision criterion: Can an expert replicate your net value from documents alone? If not, gather missing evidence before negotiating.

When this may not be the right fit

Sometimes it is fair to exclude or heavily discount equity interests.
Where value is contingent and distant, where options are significantly out of the money, or where plan rules prohibit transfers and tracking future proceeds would be disproportionate, parties may prioritise other assets such as the family home, marital assets with clear title, or a portion of a retirement account.

Example: a tiny grant with a cliff in three years may not justify the compliance and accounting costs.

Watch-outs

• High compliance cost relative to value
• Lapses likely due to employment risk
• Plan bans on third-party sharing without alternatives

Decision criterion: Do administration and legal costs exceed 10–15% of expected value? If yes, rethink inclusion.

How to judge if you need this now or later

Act quickly when a vesting date, exit event or redundancy is imminent.

If vesting is near, if options are about to expire, or if the employer is considering a listing or sale, address equity early in Divorce and Separation proceedings to avoid value leakage.

Example: include protective orders to pause discretionary sales without consent and to preserve documentation for forensic review.

Prioritise now if

• Vesting, expiry or blackout changes within 90 days
• Corporate events may alter value or tax
• Redundancy or role change is flagged in HR notices

Decision criterion: Is a major equity event scheduled this quarter? If yes, escalate and document.

Where this connects to your broader property settlement

RSUs and options are one part of a wider property division that must still be just and equitable.

Align your approach to equity with superannuation splitting, business valuations and debt allocation. Consider consent orders that set a clean framework for future proceeds and tax.

Example: the parties can agree to share net value from equity while exchanging other assets to balance contributions and future needs.

Connected topics

• Division of assets and liabilities
• Consent orders and enforcement
• Business and trust interests alongside ESS

Decision criterion: Do the orders produce a practical, enforceable outcome across all assets, not just equity?