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by Jenét G. Pequeño, Esq.

Do you have an ESOP (Employee Stock Ownership Plan) and now find yourself in the middle of a divorce? Were you employed at a prior company that provided an ESOP as part of your benefits structure? If so, when it comes to divorce there are several concerns that are of particular note.

How much of the ESOP is marital and how much is non-marital? If your company has contributed to an ESOP on your behalf, we have to first determine if it has vested. There are summary plan descriptions that will describe how contributions are made and also how withdrawals may be made. When in the middle of a divorce where there is an ESOP, if you can trace the origins of the funds and also show that the contributions from the employer were prior to the marriage, then you have strengthened your position in keeping these funds as your sole and exclusive non-marital property which would not be given to your spouse.

However, if you were receiving contributions from your employer after the date of your marriage, the math can get particularly complicated. We will most likely need the accounting services of an ESOP evaluator who is an accounting professional who will help determine what the values are adjusting for any fluctuation in the stock price and with which the marital and non-marital portion will have to be separated out. For those portions that are non-marital and any gains that can be attributed to that, it is the goal to ensure to ensure those amounts are left out of any distribution between you and your spouse. There will also have to be a QDRO (Qualified Domestic Relations Order) to separate and divide the marital portion between you and your spouse. Illinois is an equitable division state, which means that it is not automatically a 50/50 division of the marital portion. The spouse who earns less income could request the court to receive 65/35 in a division of that portion of the ESOP that was acquired during the marriage relationship.

Our firm can help you fight and maintain that which is rightfully yours. We can even assist in obtaining the documents and statements from current and past employers wherever your ESOP account may be held. We have assisted in tracking down assets for our clients and even have close relationships with financial planners in the area. So, if you have and ESOP and are pondering divorce, please call (847) 616-0980 and ask to speak to one of our lawyers to learn your rights.

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