Prenup and RSUs / Stock Options — Protecting Hi-Tech Wealth

RSUs and Options in Israeli Divorce Law

Israel's tech sector has made equity compensation — RSUs (Restricted Stock Units), stock options (ESOP), phantom shares — a major component of many couples' net worth. When marriages end, this equity is often the most contested asset.

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Important disclaimer: This article is for informational purposes only and does not constitute legal advice. Tax and financial implications of equity in divorce are complex. Consult a licensed Israeli family law attorney and a tax advisor.

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The Core Legal Problem

Under the Property Relations Between Spouses Law 5733-1973, assets accumulated during marriage are subject to resource balancing (airzun mishaabin) — meaning they are divided equally at divorce. Assets owned before marriage are generally separate.

RSUs and stock options complicate this because:

1. Granted before, vesting during: Options granted at hire (before marriage) but vesting on a 4-year schedule that overlaps the marriage — are they pre-marital or marital?
2. Employment spans the marriage: If you work at the same company both before and during marriage, new RSU grants during the marriage arise from an employment relationship that predates it.
3. Value accrues non-linearly: A startup valued at $50M when options were granted may be worth $5B at divorce — most of that gain occurred during the marriage.

What Israeli Courts Have Said

Israeli courts have not reached a uniform rule. Decisions vary depending on:

• Whether the options were granted as compensation for past or future work
• Whether the vesting schedule creates a "right" before vesting
• The specific circumstances of the couple and the company

This uncertainty is itself a risk. Without a prenup, you're leaving a potentially multimillion-shekel decision to judicial discretion.

What a Prenup Can Do

A properly drafted prenup can:

1. Define pre-marital equity clearly

"All RSUs, options, warrants, and other equity instruments granted to Party A on or before [marriage date] shall remain Party A's separate property, including all shares that vest from such grants after the marriage date."

2. Establish a vesting proration formula

For grants that span the marriage date: "The pre-marital portion of any equity grant is calculated as: (months of service before marriage date ÷ total vesting period months) × total grant size."

3. Address gain on pre-marital equity

"Appreciation in value of pre-marital equity, including IPO gains, secondary market sales, and M&A consideration, remains separate property."

4. Cover future grants from pre-marital employment

"Equity grants made by [Company Name] to Party A after the marriage date, arising from Party A's employment relationship that commenced before the marriage date, shall be treated as follows: [formula or separation/sharing provision]."

Nobiru's Approach

Nobiru's clause library includes the BUSINESS_ESOP clause, which addresses:

• Options and RSUs granted before marriage
• Vesting schedules that overlap the marriage
• The principle that equity arising from pre-marital employment is separate property

The partner attorney reviews the specific wording and can add customizations during the review stage for couples with complex equity structures.

A Note on Crypto and Tokenized Assets

The same principles apply to cryptocurrency, tokenized equity, and other digital assets. If you held BTC, ETH, or startup tokens before marriage, a prenup should explicitly address how these are treated — including gains that occurred during the marriage.

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This article is for informational purposes only and does not constitute legal advice.