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What happens to stocks in the divorce?

On Behalf of | Nov 23, 2021 | Property Division

According to U.S. News & World Report, nearly 53% of American families hold investments in the stock market nowadays. Some individuals purchase or trade stock on their own, while others might obtain stock investments through employment benefits.

With more than half of American families holding some sort of stock, these assets can frequently lead to issues in divorce. So, what should you know if you or your spouse holds stock options?

Complex assets often mean complex division

Stocks themselves are complex – and often volatile – assets. Their value can be great, but they are also subject to frequent change depending on how the market fluctuates.

These aspects alone make dealing with these investments even more complicated in the event of a divorce. You may wonder: Do I have a stake in my spouse’s stock options? How will these complex assets be divided at the end of a marriage?

Three things to remember

Worrying about how to handle these assets is common. After all, it is critical to negotiate a fair division of assets during a divorce.

When it comes to complex assets like stock options, it is often beneficial to consult a legal professional to help ensure a fair division. However, there are also three things you should keep in mind in these cases:

  1. Is it separate or marital property? Like any piece of property North Carolina couples acquire during their marriage, one of the first steps is to determine the classification of the property – and, in turn, whether it is subject to division – before moving forward.
  2. What is the stock’s value? Calculating the value is essential to obtain a fair division. However, it is also critical not to forget any tax implications of dividing this asset, and factor such implications into the value.
  3. How will we divide it? There are different ways to divide a stock option. Some spouses might choose to sell the stock and divide the profit, while others might split the actual investment in the stock. It is important to understand the options to divide these complex assets, as well as the potential effects.

Of course, considering these three issues is important when dividing any type of asset. It is even more important to approach property division with care and attention to detail when it comes to complex assets.