Yes, you can pass on your options in a Willful will, but only if your option plan allows for options to be passed on.
Understanding Stock Options:
- Options vs. Shares: If you have options in a company, you don’t own shares yet; you have the right to purchase shares. Passing on shares is straightforward since you own them, similar to other assets like a house or money in a bank account. An option is a right to buy shares in the future, so you don’t own anything until the options are exercised and converted into shares.
Checking Your Option Plan:
- Plan Terms: The first step is to check your company's option plan to see if it allows options to be passed on to a beneficiary. Some plans state that the options vest upon death, allowing the executor to exercise them, turning the shares into an estate asset. Other plans state that options expire upon death, meaning there is nothing to pass on. If unsure, contact your HR department.
Passing on Options:
1. Leaving Them to a Specific Person: Add the options as a specific gift in the gifts section (app.willful.co/gifts). For example, specify "My stock options in [LEGAL COMPANY NAME]."
2. Flowing with Beneficiary Allocations: On Willful's allocations page, outline how you want all your assets to be distributed. The options will follow these allocations without needing to be specified elsewhere.
Additional Considerations:
- A will can outline not only who will receive the options but also how the purchase price and taxes will be paid (e.g., by the estate or the recipient). Currently, Willful does not allow specifying who pays the exercise price and taxes.
- For detailed instructions on handling the purchase price and taxes, consider consulting a lawyer or tax specialist. They can help create a customized will addressing these points.