SAN JOSE — With stock options, time shares and the high cost of living in Silicon Valley, divorces are no longer only about who gets the kids and the house. Now couples, attorneys and judges must figure out how to split stock options and how a single parent can afford to live in the area to be able to see the children.
Family court workers say what is making marriages harder to dissolve include nebulous assets, such as stock options. Those present the difficult question of how one divides a future employment benefit.
Typically, options are looked at as property, but sometimes they can be considered income.
That has been one of the central questions in the divorce of Silicon Valley couple Iris Fraser and David Cheriton, who filed for divorce in 1994. The divorce was finalized four years later and they are still battling over whether Cheriton must exercise his stock options in Cisco Systems and share even more money with his children and ex-wife.
Cheriton became a millionaire in 1996 when the company he co-founded was bought by Cisco. He agreed to create a trust for each child using a certain number of Cisco stock options, worth millions of dollars.
He also exercised 3 percent of his stock options for Fraser. And he pays child support each month.
Cheriton says he doesn’t want to exercise more options because he doesn’t trust his ex-wife and thinks she would try to get more money.
Fraser says Cheriton has the money and that “after everything the children and I have been through, we shouldn’t be treated like a bag of garbage.”
The court has sided with Cheriton so far, ruling that his options should not be considered income unless he exercises them and sells the stock.
Another reason the marriages are hard to dissolve is because of the high cost of living.
“People can’t afford to be divorced,” said Phil Hammer, a family law attorney who says he often discusses the financial aspect of divorce with his clients.
“I tell them to think twice about what they’re doing,” he said. “They just may not have thought about what is going to happen when they try to set up a second household, and they realize a one-bedroom apartment in Palo Alto is going for, what, $2,100 a month? And if they’ve got kids, one bedroom will not be enough.”
Deborah Taylor, a mother of two, found out how expensive being a single parent in the valley is, following her 1998 divorce from Richard Taylor.
She bought a San Jose townhouse for herself and her two children, but the payments were too much, so she moved to Arnold, a mountain town near Bear Valley. That created problems, however, because Richard Taylor wanted to keep his weekday visits with the children, and a two-and-a-half-hour drive to Arnold made that difficult.
A court officer recently recommended that the children stay in Silicon Valley. While Richard Taylor calls that “legitimate,” he said he does not want the children to be away from their mother either.
“It’s just not a great situation to be in,” he said.
While getting a divorce is more difficult, fewer couples are splitting up. In 1990, there were 8,997 divorces, according to Santa Clara County Superior Court’s Family Resources Division. In 1995, there were 7,983, and in 1999, even with a larger population, there were 7,315.