Property division during a divorce can be incredibly complex. One of your biggest concerns is likely to be maintaining your financial stability after your divorce is final.
Dividing a house or car is one thing. You decide who gets what and pay each other any difference. But your investments are another story.
Even if you are keeping most, or all, of your investments, there are several things you should do to make sure you do to protect your investments during a divorce.
Have accurate information and access to all accounts
Before your divorce starts — or after it stars but before you sign a property division agreement — do your research on all investment accounts. You need to know exactly what investments are considered marital property, because they must then be split in your divorce.
Marital property is property acquired by you or your spouse after marriage. Some property acquired after marriage is considered separate property, such as gifts or inheritances, but in most divorces, investments are going to be part of the marital property mix.
Get access to all your investment accounts and confirm whose name they are in. Some may be jointly held, while others may be in your name or your spouse’s name.
Check and update your beneficiaries
Even if an account is in your name, you could have your spouse listed as a beneficiary. You should update your beneficiary to someone besides your spouse, assuming you no longer want them to be your beneficiary.
You may consider doing a withdrawal from an investment if you are going to owe your spouse a sum of money as part of property division. Before doing so, research any costs, penalties or tax consequences.
Consider a qualified domestic relations order
If you are in this situation, you may think about getting your spouse the money by simply splitting a portion of the investment account with them. This is usually accomplished by a qualified domestic relations order (“QDRO”). This order is specifically designed for these types of situations, and many times the split can be done without any penalties.
Property division during divorce is rarely easy, and you are likely to encounter some complications along the way. An experienced divorce attorney can help you exit your marriage with your finances still intact.