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What happens to stocks in divorce?

On Behalf of | Aug 20, 2021 | Divorce, High Asset Divorce, Property Division |

Many people spend significant time, money, and effort building a solid stock portfolio. Divorce can significantly impact such investments. It is important to know how the court may handle your investment portfolio, stock options and restricted stock.

Timing is everything.

When did you acquire the stocks in your portfolio? If you began to build your stock portfolio before you were married, the court may consider that portion of your stocks as your separate, non-marital property. However, the court generally considers stocks that you acquired after your wedding to be marital property and subject to division with your spouse unless you have an agreement in place to protect these specific assets.

Your marital assets will not just include stocks purchased during your marriage. Stock options and restricted stock received as part of your employment compensation package may also fall under the category of marital property if they were awarded during the marriage

What are your investments worth?

No matter how much you focus on safe and reliable investments, the value of the stocks you purchase can vary depending on various market factors. Related market gains and losses make establishing the value of your portfolio during property division more difficult. You may need to consult a financial professional to establish the value of your stock portfolio.

Valuing your investments becomes much more complex when your portfolio includes stock options and restricted stock. Some Illinois cases indicate that the court cannot properly evaluate the worth of stock options until they are exercised. As a result, the court might defer the division of such options.

While dividing the stocks in your investment portfolio can be challenging, a carefully built legal strategy can ensure that you continue to benefit from these investments after you enter the next chapter of your life.