Experience. Diligence. Professionalism.

What happens to your investment holdings when you divorce?

On Behalf of | Oct 7, 2022 | Divorce |

Couples in New York often have to make careful choices about how they hold their wealth. Simply putting funds in a savings account won’t maximize returns. It is common for people to diversify their assets by maintaining an investment portfolio, buying real estate and otherwise finding numerous different ways to both store and increase their personal wealth.

With the exception of those who have already negotiated terms for property division matters, possibly in a prenuptial agreement, married couples contemplating divorce in New York will usually need to split all of the assets they acquired during their marriage, as well as anything purchased with the income earned during the marriage.

At least a portion of your investment holdings will likely be marital property subject to equitable division. What happens to those investment accounts when you divorce?

You may need to liquidate them

In some situations, such as litigated property division proceedings or scenarios where there are few liquid assets for a couple to divide, the solution for investment accounts may involve selling them and then dividing the proceeds from the sale in a specific manner.

Obviously, the risk with this approach is that you may have to sell certain investments when will not be financially beneficial to do so. Liquidating assets can be the fastest way to divide them, but it can also lead to diminished returns from your marital estate.

You could negotiate for one spouse to keep them

Especially when the immediate sale of investment holdings would result in a financial loss, couples may want to negotiate a property division settlement. They could either arrange to have each spouse receive certain investment resources or to allow one to keep all of the financial investments and the other to receive valuable property, like the marital home, in exchange.

If you can reach a settlement that you are both comfortable with, the two of you can take any steps necessary to fairly divide the property you chair. Allowing one spouse to keep investment accounts or specific assets may be a necessary compromise when negotiating a divorce settlement.

Recognizing that at least some of your investment holdings are likely subject to division can help you better prepare for your upcoming high-asset New York divorce.