How it works

An alternative way to apply the time-rule formula from In re Marriage of Nelson (California, 1986). Where the common practice (Vest-Level Nelson) applies the formula separately to each tranche, this approach applies it once to the entire grant — treating the grant as one smooth accrual from grant date to the last vest. Since the original Nelson case had only a single vesting event, both approaches would have produced the same result; the distinction only matters on modern multi-tranche grants. This is not an established method from case law — it is included here as an analytical tool to compare the two application styles. On ratable grants (equal tranches, evenly spaced), Grant-Level Nelson produces the same result as Ratable Vested — the two curves overlap because the grant-wide linear assumption matches the actual vesting schedule.

Formula

The Under-Crediting Problem on Non-Ratable Grants

Grant-Level Nelson quietly assumes a smooth linear accrual from the grant date to the last vest. That assumption is mostly harmless on a ratable grant, because the actual vesting schedule is also close to linear. But on grants with unusual shapes — especially front-loaded or cliff-heavy schedules — the straight Grant-Level line can sit well below the actual vested step function at many points, effectively under-crediting the community for shares that have, in reality, already vested.

On the ratable grant, the green Grant-Level line closely tracks the yellow vesting schedule — the implicit assumption holds, so the two agree. On the front-loaded grant, however, the straight Grant-Level line is below the yellow step function for most of the grant's duration, because vesting happens faster early than Grant-Level acknowledges. The effect is even more pronounced on the early-cliff grant: after the cliff vest, yellow jumps to 240 shares while the Grant-Level line is still near 60 shares. A DOS landing in the gap between yellow and green gives the community a materially smaller allocation under Grant-Level Nelson than under the Vested Shares method.

For front-loaded or cliff grants, the spouse's counsel will typically argue for Vested Shares or Vest-Level Nelson instead, both of which respect the actual vest timing. Grant-Level Nelson is cleanest — and most defensible — on genuinely ratable schedules.

In practice

This method is not commonly used in court proceedings. It produces a single straight line that closely matches Vest-Level Nelson on ratable grants but diverges significantly on non-ratable ones — as shown above. Its primary value in this tool is as a comparison point: if you see a large gap between grant-level and vest-level, that tells you the grant's vesting schedule is uneven enough that the choice of method matters.