POSITION: The Equality in Marriage Institute advocates that marital assets, including pensions and stock options, should be distributed on a fair and equal basis if the marriage ends in divorce.

BACKGROUND: In 41 states, divorce law is rooted in English common law, which favored the wealthy aristocrat but gave almost no rights to his wife in marriage, death or divorce. The "equitable distribution" system that evolved gives judges enormous power to decide what is "equitable" in divorce property settlements. The judge's concept of what is "equitable" too often isn't what is "equal" but what the judge believes is "enough."

Only nine states (Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin) follow the community-property model, which starts the distribution of marital property at 50-50. Community-property laws, however, also have their flaws. When assets are split in half, one spouse may be awarded custody of the children and the family home but not enough income to support the lifestyle. Yet community property law is better than leaving the division to the judge.

The division of marital assets once meant deciding who got the family home. Increasingly, pension plans and stock options to be exercised in the future also need division. Since the late 1980s many American companies use unvested or non-exercisable stock options as a way to reward employee performance. Once reserved only for top management, many employees receive such perks today. The number of U.S. companies that have wide-ranging stock option plans has doubled since 1993. More and more, stock options are significant assets to be divided in the process of divorce.

A stock option is "the right to purchase a specified number of shares of stock for a specified price at specified times." The most straightforward method for dividing stock options earned during a marriage is for the agreed-upon number of options to be transferred to the other spouse. No evaluation is needed this way. However, most company plans do not allow for this type of transfer. If not, stock options need to be distributed one of two ways. In a "deferred distribution upon exercise of options" (constructive trust), divisions is done after the options mature sometime in the future. In "present valuation," the stock options are valuated by one of several methods. Then one spouse is given cash or its equivalent.

To ensure equality in divorce, laws in the United States need to be reformed. All 50 states should start with the premise of 50-50, or equality in divorce, with percentages adjusted up or down depending on circumstances of the case such as which spouse receives custody of the children. Marital assets should be uniformly defined as included pensions and stock options earned during the marriage by either partner.

PERSONAL ACTION: Know your state laws regarding marriage, marital property and divorce. Know where and what are your own marital assets to prepare you in case your marriage ends in divorce but also should your partner die or become disabled. Claim your fair share of pension plans and stock options if you divorce.

SOCIAL ACTION: Join the Equality in Marriage Institute to work for legislative reform. Research divorce and marital property laws in your state and identify legislators who support equality in marriage and divorce. Lobby for reform based on guaranteeing equality in divorce. Click Here for a Marital Assets Check List