When people get a divorce, they have to divide their investment accounts between them. There are several things that people should consider as they prepare to divide their investments.
Before spouses decide who will keep each account, they should take stock of what they have. According to FINRA, people should examine the details of each investment account. Is the account set up in the names of both spouses or just one? Did people purchase the accounts together or did one of them own some before the marriage? People usually need to divide only their marital property. If one spouse purchased investments before the marriage, then he or she usually keeps these.
Understand the tax implications
As people decide how to handle their investment accounts, they should consider their taxes. People may have to pay capital gains taxes if they sell their investments. Additionally, some accounts may require people to hold the investment for a certain amount of time. If people sell before this time period ends, they may have to pay additional costs. Some of these expenses may be difficult for people to manage after the divorce.
Consider several options
People may divide their investment accounts in many ways. According to Fidelity, some people may choose to sell their marital investments and divide the money between them. People may also split the accounts. They may decide that each of them will receive a certain number of investments. Conversely, one of them may take the stock in one company while the other spouse takes the stock for a different one.
As people consider their options, they should remember that New Jersey is an equitable distribution state. A court may not always divide assets equally between spouses. A spouse who has access to more resources may receive a smaller share of the investment accounts, for example.