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What happens to your investments during divorce?

On Behalf of | Oct 18, 2022 | High Asset Divorce

Divorce means you have to relinquish at least half of your financial assets in most cases. Divvying up real estate holdings, bank accounts, inheritance money and investments can get tricky and stressful.

Given the amount of time it takes to accumulate investments and build them up, knowing you could lose some of their value is disheartening. Protecting your money will require preparation and strategy.

Selling and splitting

In some cases, you might have the option to sell your investments and split the proceeds with your soon-to-be ex. An example would be shares of the company you work for. Perhaps you would consider selling your shares, or at least part of them, and then splitting the proceeds.

This strategy might also work for other investments so long as the conditions allow. Many financial investments require you to comply with terms that prevent you from withdrawing money before a certain date. In this circumstance, you might want to collaborate with a financial professional who can help you identify the best course of action.

Transferring and splitting

Another option you could have is to transfer funds into a new, personal investment account. According to FINRA, an IRA, for example, may allow for a penalty-free distribution to allow both parties to collect their portion and transfer it into a personal investment account. However, other investments such as a 401k could require a QDRO or other formal legal document to describe the strategy for splitting the funds.

The most important part is to know which investments you have and how to access them. With the help of professionals, you can have an accurate idea of what belongs to you so you can advocate for a fair settlement.