You need to review the terms of your company's plan and your grant agreement. In most cases, the options do not lapse. After your death, your estate or beneficiary may exercise any vested options, according to the option grant's terms and deadlines, along with any estate-planning documents (e.g. a will).

Alert: Read your stock plan and grant agreement for specific provisions that apply upon your death. Be sure that both the executor or administrator of your estate and your beneficiaries know about the rules that apply.

The treatment of unvested options varies, as explained in another FAQ.