Divorce at Altitude: A Podcast on Colorado Family Law
Divorce at Altitude: A Podcast on Colorado Family Law
When Stocks and Bonuses Matter: Navigating Complex Asset Division in Divorces | Episode 235
Welcome back to Divorce at Altitude with Ryan Kalamaya and Amy Goscha! After a short break, Ryan and Amy return to unpack one of the most complicated aspects of modern divorce: how to value and divide complex assets like restricted stock units (RSUs), stock options, and other forms of deferred compensation.
From tech employees with performance-based RSUs to professionals with future bonuses or stock grants, these assets can significantly impact property division — but are often misunderstood or overlooked. Drawing from Amy’s recent presentation at the Family Law Institute in Vail, this episode breaks down how these assets are classified, valued, and divided under Colorado law.
Episode Highlights
Understanding RSUs & Stock Options
• How restricted stock units (RSUs) differ from stock options
• What “vesting” really means and why timing matters during divorce
Valuation & Expert Roles
• When to bring in valuation experts or use the “time rule” formula
• How constructive trusts help divide assets that aren’t yet liquid
• The difference between joint, shadow, and rebuttal experts
Legal & Tax Complexities
• How courts determine marital vs. separate property for RSUs
• The role of employment agreements and performance-based vesting
• Common pitfalls when ignoring tax implications and timing
Key Takeaways
• Complex assets require both legal and financial expertise — don’t try to DIY.
• Early identification and documentation can prevent major disputes later.
• Work with your attorney and valuation expert to build a clear, fair strategy.
What is Divorce at Altitude?
Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.
To subscribe to Divorce at Altitude, click here and select your favorite podcast player. To subscribe to Kalamaya | Goscha's YouTube channel where many of the episodes will be posted as videos, click here. If you have additional questions or would like to speak to one of our attorneys, give us a call at 970-429-5784 or email us at info@kalamaya.law.
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DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.
Hey everyone. I'm Ryan Kalamaya. And I'm Amy Goscha. Welcome to the Divorce at Altittude, a podcast on Colorado family law. Divorce is not easy. It really sucks. Trust me, I know. Besides being an experienced Divorce attorney, I'm also a Divorce client. Whether you or someone considering Divorce or a fellow family law attorney, listen in for weekly tips and insight into topics related to Divorce co-parenting. And separation in Colorado. Welcome back to another episode of Divorce at Altittude. After quite a break, we are back. And this episode, I am joined by my lovely co-host, Amy. Amy. What what are we talking about?
Amy Goscha:We're talking about all those complex assets that no one seems to know how to divide, so we're trying to give a pathway to help people understand what they are, how to value them, and what to do with them and Divorce.
Ryan Kalamaya:Indeed and you did a presentation on this at Family Law Institute in Vail. It's the Annual Divorce Lawyers Conference, or Family Law Lawyers conference. I wasn't able to make it'cause I had some kid responsibilities or children responsibilities, but everyone came up to me. Afterwards and reached out and said this was the best program of the whole conference. Let's start off and talk about why these assets matter, Amy.
Amy Goscha:Yeah, so as I think we, get into having more technology, we have like cryptocurrency, we have these types of things that are coming up and as Divorce attorneys and people going through Divorce, we have to figure out what to do with'em. So when you look at businesses, we've talked a lot about like business valuations. A lot of times what's coming up in my cases, and I'm sure in yours, Ryan, are r RSUs and those are restricted stock options. So can you just for our audience, remind them like where this will come up and. Kind of what we're talking about when I say RSU?
Ryan Kalamaya:Yeah. So we if we go back to our hypothetical Divorce clients, Eric and Melanie Wolf, if Eric is working for some sort of company and often it's a either a private company or it can be a public company. So let's say that in, in the news right now is Nvidia. So Nvidia Eric is a software, some, some sort of software engineer. And he. Is compensated through salary, but he'll also get issuance of stock. And the most common is in the tech world. It's really common in, in those industries. But Eric will get he'll be re issued. Restricted stock. And so there are may various restrictions on whether he can sell that could be locked up. And there's other aspects. And so Amy, talk to me a little bit about the valuation and why this might matter and also what kind of common pitfalls or things that you see in terms of these being overlooked. In divorces.
Amy Goscha:Yeah, so the kind of the starting framework is always when you're figuring out if something needs to be valued or even if the Divorce court has the ability to deal with it, meaning jurisdiction, you have to look at the property statute. So we have to first figure out, is it property, is it marital, is it separate? And so what gets complicated with RSUs is. Understanding, is an RSU property or is it not? Is it marital? So you really need to look at the employment, the RSU, agree, the employment agreements on these things to figure out how they're valued and when they best. Because a lot of times clients will give me, a statement that says, here's the vested amount of the RSU and here's the value. That doesn't necessarily mean that's the only marital portion. So a lot of times we're pulling in experts to come in and look at the valuation because we have certain cases that we look at, such as like in marriages of Miller where options that require employment after the Divorce are not marital property. We also have balance in that we look at which if some employment conditions are already met, a portion of the stock, even if it's not vested yet, might be considered marital. We also have in Marriage of Powell that looks at, we're looking at the employment contract to figure out is there an enforceable, right? Is there is this property? And so we have to look at what are the conditions. So it gets pretty complicated, pretty quick. And I'll look at these agreements, but a lot of times I will consult with an expert to help me with it as well.
Ryan Kalamaya:Yeah. And you mentioned stock options, the, just I want listeners to understand Eric, they're, it's the same beast and they're fairly common, but they're distinctly different from restricted stock units or RSUs. So just so people can understand stock options would be Eric Wolf works for Nvidia. He's issued options. The option would allow him to purchase. NVIDIA's stock at a set price, and that price might be a hundred dollars a share. And the Nvidia in a year when those options vest could be at$200 a share. And so he'll issue or, exercise the stock option, there's a, what's called a strike price. The strike price is a hundred dollars, and then he can immediately have a hundred dollars of appreciation. And that is taxed at long term capital gains. If it's, if it's a year. And it can get really complicated because Eric Wolf will say I am not vested. And I don't have the vesting. And so a lot, when we talk about vesting, Amy, what are we talking about in terms of vesting?
Amy Goscha:So vesting means like at a certain date, essentially you can sell it at like that strike price. So a lot of times you'll look at these grant agreements and there might be a lot of times they're over, like a three year period is what I see where certain shares will vest and you can like the strike price, the value is that, as to that date. So a lot of times you'll look at the grant agreement. And there will be some that are not exer. You can exercise those essentially those stock options, at that date. So I don't know if that answers your question or if you have anything else to add.
Ryan Kalamaya:I think that for people, they want to understand the, it can get really complicated, but Eric, another kind of example, I think that might be helpful for people. To understand vesting is that Eric Wolf could be given certain shares or stock options and to incentivize him to stay at Nvidia. He won't be able to exercise or they won't actually be vested for three years and they could be. In year two of that vesting schedule during the Divorce. Okay. So then we've got this issue of he's exercised, or he is, he's done a year and he's earned time towards that vesting, but that he can actually do anything with the stock options. And so he will come to me, Eric, and I've had these clients and they say there's no property because it's not vested. And the, the answer is really, it's not so fast. And it's not so clear if you have a enforceable right? And it can be property, but then you've got that third year that would be earned after the Divorce. You have these kind of sliding scales of. Separate and marital property. And Amy, when you're talking about the something off in the future and then we also mentioned taxes. We mentioned kind of possibilities. The other aspect I wanna mention is the vesting might not always be based on time. That's a super common methodology, but there could be performance metrics. If the company hits a particular revenue or they do this or that, it really depends. And so it gets really complicated and that brings in experts. So maybe talk a little bit more about the use of experts in particular with RSUs and stock options.
Amy Goscha:Yeah, and it can get really complicated and why we have to bring in experts a lot of times is that if we're looking at a date of Divorce and if some of those. Shares have been, are during the, we determine that they're during the marriage, then we have to figure out what the value is. And sometimes it can be easier if it's like a publicly traded company versus, like a startup. So I think a lot of times what the business valuation expert can come in and do, and they can look at the grant, but they can also look at the employment contract. And sometimes we actually will talk to. Key people within the company to figure out, are these considered earned or not? So it gets complicated in that analysis. And also looking at. If you are going to when we're talking about dividing these one of the options that I find is really helpful is to put this type of property into a constructive trust. And the language in the separation agreement needs to cover well when they're exercised. Like how are you gonna figure out what they're valued at? How are they gonna be paid out? How do you deal with taxes? What happens if the company is sold? So it's all of those options that I'm working with, the business evaluator, not only to value, but also to help me with coming up with some of those pitfall and the language to put in the agreement to make sure that I'm covering every scenario that could happen, if I'm putting that in a constructive trust.
Ryan Kalamaya:Yeah. And going back to if people wanna learn more about the options and experts there's episode one 11. It was What to do with Stock options and a Divorce with Ken. Nas. But going back to what you were saying, Amy, is that you can either value, I want people to understand there's kind of two major paths that you can go down. One is you value it. So Eric Wolf, we would say these options, the marital portion is worth. X and then the separate property component might be worth y. And if the marital portion is, let's say, worth$500,000, then you know, does Eric, if you're doing an equal division of property, he's gotta come up with$250,000. In cash or some other property to offset that with Melanie Wolf. And then the other option that you were mentioning Amy is the in kind division or putting it in a constructive tru trust and saying we don't know exactly how much these are worth right now or we don't want to argue over'em. And. But it could be in a year or two years. And then it could be that we're gonna equally divide whatever that amount is, or 60 40 or whatever it is. And oftentimes we'll say, we'll divide the net amount because you gotta account for taxes. And so it really depends the pro on the up, the valuation component. In terms of the, in the divorces that you have a value, you have certainty. And, but then you person, people's Eric's gotta come up with cash or some other property and there might be liquidity issues. And I think, Amy it's safe to say that these issues can. Be overlooked. O oftentimes, and people may not even know Eric Wolf can come in like I referenced earlier, and say there, there's no property. It's not vested. There's nothing, nothing to see here.
Amy Goscha:Exactly. So I think, if I am Melanie's attorney, I'm gonna, I need to make sure that I'm getting. All of the documents I need from Eric's company and I'm gonna be, consulting with my experts. Sometimes we put'em in a constructive trust because there might not be enough money to pay out Melanie for her 50% portion, but in the higher asset cases, maybe there is. Yeah.
Ryan Kalamaya:Okay. Switching gears a little bit, and it's related to the constructive trust, but, talk to our listeners Amy, about the time rule and some of the expert models that exist out there in terms of calculating the marital versus separate portion in these complex assets.
Amy Goscha:Yeah, so we have, we use a lot of times what it's called, the time formula. And that means because some of. Some of the options are earned be like during the marriage. Some of them might be, have, might have been earned prior to the marriage. And so we have to figure out some kind of pro, I'll call like pro rata split to figure out what is the marital portion. So essentially to figure out the marital portion under the time formula. You take the time employed during the marriage and you divide it by the total. Time from the grant to the vesting. So that's just in general what the time formula is. And we look at the fair market value of the option at the vesting date. And a lot of experts can also use the Black Shoals model. That a lot and it gets a little more complicated because you have to look at. There's also discounts that are put in place. And so depending on the company, the discount can vary. So that's what we're talking about when we're talking about Time Formula plus the valuation tech techniques that.
Ryan Kalamaya:The issue that I frequently run into Amy, is so you both have a property interest, which we've been really focused on, but then you also have this income component because you can be taxed or gifted. The, depending on the circumstances of the stock options or the RSUs, if historically, Eric Wolf has received these RSUs or stock options and then sold them and then, used the proceeds to to pay for the lifestyle, there can be some complications there. But I will, identify the issue. And then oftentimes I'll bring in a, a shadow or rebuttal. Expert or someone to help me figure these issues out. And, can you talk to me a little bit about what different kinds of experts in their roles we've talked about on different episodes, but in terms of complex assets what are the role of shadow and rebuttal experts?
Amy Goscha:Yeah. So I will bring, and I'm sure you'll do the same thing sometimes I'll bring, I bring in my shadow expert, if I'm not just, so here's the options that you have. So under the rules, essentially it says you have to try to confer to have joint experts. A lot of times with these higher like asset cases attorneys will have their own experts. If you have a joint expert, that means it's hired by Melanie and Eric to essentially value, let's call the RSUs. You can bring in, if I'm Melanie's attorney, I can bring in my own expert that's called like a shadow expert that I don't have to disclose right away. And I am the attor as the attorney and the client. And the reason why I'm doing that is to protect work product. But essentially the shadow expert can. Help me as Melanie's attorney post certain questions to the joint experts, get certain information. And then you can also use a shadow expert on the other side to do a report in response to the joint experts report. If I don't agree with it. So I don't know. Do you have anything else to add to that, Ryan?
Ryan Kalamaya:No, I think that the it really depends on the circumstances. And one issue that we always deal with is the costs in terms of, what were you talking about? Are we talking about like just a hundred stock options that are worth, at most$10,000 or are we talking about. A slew of restricted stock. I think that is a conversation that any attorney needs to have with their client, both on Eric or Melanie's side in terms of, how what are the kind of issues and what's what do you, is the juice worth the squeeze? And so it's, those are the sorts of issues that I think people. Underestimate in terms of the costs or possibly overlook. And one thing that I think often is that you have these kind of binary viewpoints by Eric or Melanie is. It's all marital or it is, there's no marital portion at all. And I think that it's usually a combination or not a combination, but it's far more nuanced when you consider the often separate property components because you often will have vesting. Or these options and there's future work that is done. And, that brings up in Ray marriage of the in marriage of Sewell and some other cases. Sewell is, I'm a Broncos fan, but and I grew up. Rooting for kind of the John Elway and Old Broncos dates me, but Steve Sewell was a well-known tight end and one of the issues in his Divorce, he went through a Divorce was a Pro Bowl bonus. And, he got divorced in the middle of the season and it was whether or not he had a contractual right to a bonus and, but he was, it was for the Pro Bowl and the Pro Bowl for listeners. Played after the season. And so the legal issue was that bonus, marital versus supper, which is similar to, Eric Wolf working at Nvidia. And he's got, this future vesting of stock options. Is that. It's, he's got the right to it now. And so there are kind of analogies and different issues and people, Eric, when he comes to us is usually quite shocked to learn that it can be property.
Amy Goscha:Yeah, exactly. And I think the last thing I'll leave with is just more of a. Creative way where it doesn't have to co, you don't have to have three experts in the cost of a shadow. I guess it's shadow rebuttal. Sometimes if you're going to mediation, you can hire the expert such as like a Ken Nas to come in and just do the valuation schedule or like I can consult with him to say, can you help me with these discounts? What is appropriate and why, so you can really utilize, these experts in a way that is more cost effective. So that's helpful.
Ryan Kalamaya:And I think that people need to, some, we talked about some maybe with some actionable items and some kind of common pitfalls. So one thing I think is identifying the issue from the, from like a lawyer's perspective is we identify the issue, talk to the client, and then really it's do we involve experts? And if so, we should probably do that soon. And, then you get into the joint versus retained versus rebuttal versus shadow. And then, but if you're gonna deal with it at a high level, if you're gonna deal with it and say, listen, we're gonna have an in-kind division okay, that's fine. But the, a lot of times people wait. A little bit too long and then they decide, okay, this is actually complex, and then it just drags on and then people start getting frustrated. I once had a case where the vesting was coming up like in, in three months, and then my client quit. Right before the vesting.'cause he said, I'm not going to have this, windfall. And then there was a dissipation claim. It was it became really complicated. And so I think people the 95% of divorces out there don't involve these complex issues, but when they do it is, it can be a meaningful material issue that is involved in someone's Divorce.
Amy Goscha:And I think as attorneys, like we know our lane, we know what we're experts in and not, and so when you're looking at RSUs, consulting with an expert a lot of times is necessary. Yeah.
Ryan Kalamaya:And then the final thing I think just to throw out there is that there is other forms of deferred compensation. Doctors, for example, I've seen or financial professionals people that work on Wall Street, they'll often have these significant deferred compensation. Plans. And the reason that they do that is for taxes. There can also be backroom, handshake deals to because of a looming Divorce. And so there are different kind of components to all of this. And when it gets complex that is something that, people need to be aware of.'cause it can. Really matter for people. But I hope people have learned something from this episode. It's, there's no bright line rules. But thank you for joining us on Divorce Altittude. hey everyone. This is Ryan again. Thank you for joining us on Divorce at Altittude. If you found our tips, insight, or discussion helpful, please tell a friend about this podcast. For show notes, additional resources or links mentioned on today's episode, visit Divorce at Altittude dot com. Follow us on Apple Podcasts, Spotify, or wherever you listen in. Many of our episodes are also posted on YouTube. You can also find Amy and. Law or 9 7 0 3 1 5 2 3 6 5. That's Kalamaya