Investing is an important financial strategy for people thinking about the future. Married couples often develop investment plans as a way to increase their personal wealth and prepare for retirement. They buy stocks, acquire vacant parcels of land, purchase gold or even accrue digital resources that could appreciate in value over time. Often, the intention is to hold these investments for years or even decades.
If couples invest during a marriage and then decide to divorce, they may have a challenging process ahead. Investments come in many different forms, and couples may have diversified their portfolios to optimize their financial stability. They could have a number of different types of investments to address as they seek to divide their property equitably. Spouses with investments can anticipate numerous challenges arising in the near future, including the three discussed below.
Separating personal investments from marital ones
Individuals driven to achieve financial stability and career success may have already made significant strides toward those goals before getting married. They may have accumulated real estate holdings, stock portfolios and other assets. Spouses may need to invest time and effort into analyzing their holdings to determine what is marital property and what is separate property that only belongs to one spouse.
Valuing investments
Some investments are relatively easy to value. Certificates of deposit have a fixed value based on the initial deposit and the interest accrued, for example. Real estate holdings, stocks, businesses and other assets with variable values can be more difficult to properly assess. Spouses may need to send a specific valuation date. They may also need to partner with professionals to clarify what different investments were worth on that specific date.
Integrating investments into a settlement
The final and perhaps most challenging complication when a marital estate includes investments is finding a fair way to split them between the spouses. Each spouse could retain certain investments or a portion of each resource. In some cases, it may not be practical to divide actual investment accounts or resources. Spouses may need to choose which assets each spouse retains or balance them out using other property or marital debts.
Recognizing that investments can become a stumbling block during divorce negotiations can help people prepare appropriately. Those with the right focus and proper assistance can achieve a reasonable asset division outcome despite having a complex marital estate.
