Investments can be an important part of your financial health, and you may wonder what will happen to your portfolio when your marriage ends. In Florida, a fair division of your stocks and investments can include several considerations.
Who owns your portfolio?
Before dividing stocks and investments, you must determine if they are marital or non-marital assets. Non-marital assets include any stocks and investments one spouse owned before the marriage, or those received as gifts or inheritance by one spouse. These investments stay with the person who owned or received them.
Marital property, on the other hand, includes any assets acquired during your marriage, regardless of whose name is on the account. This includes investments made after your wedding. If non-marital investments grew in value during the marriage and both spouses helped with that growth, that growth in value might also be marital property.
How much are your investments worth?
Once it is clear which assets are marital, the next step is to figure out their value. This is easy for publicly traded stocks, but harder for private investments or those with changing values. You may need the assistance of financial professionals to help determine their current and future value.
How will the court divide your portfolio?
After valuing the assets, the court decides how to divide the stocks and investments. Florida uses equitable distribution, meaning that each spouse will receive what the court considers a fair portion of their marital assets. This does not always mean a 50/50 split. The court looks at things like how long the marriage lasted, each spouse’s financial situation, contributions to the marriage (like homemaking and raising children) and any career or education interruptions.
You have a say in what happens to your investments.
While the court determines how much you should receive, you can still make important decisions about your finances. Many couples can negotiate a fair division of their stock portfolio, often leading to a result that both parties like better.
Depending on your priorities, you may be able to keep the specific investments you value or move forward as the sole owner of your investments in exchange for other assets of similar value. You may even choose to sell your investments, divide the proceeds and begin the next chapter of your life with greater financial flexibility.
You should also carefully consider the ways that dividing your retirement accounts can impact your taxes. For example, selling certain investments could mean that you have to pay capital gains taxes on your profits. Early withdrawal from investments like your retirement accounts can also subject you to fines and taxes if done incorrectly. Given the complexities associated with taxes and investments in a divorce, it’s often wise to consult with a financial advisor and legal professional who can help you create a financial plan that supports your long-term stability and goals.
Dividing your stocks and investments in a Florida divorce involves major financial decisions. However, with help from financial and legal professionals and a strategy based on your priorities, you can handle the division of your assets more smoothly and confidently.