Couples that are in high-asset marriages often diversify their holdings for protection. Rather than putting all of your money into your business or real estate, you probably try to spread it out in as many places as possible.
That way, if one area of the economy goes into decline, you don’t have to worry about a massive drop in revenue or personal worth. Financial investment might involve anything from holding stock in a company to buying into a hedge fund.
Your investment accounts could complicate an upcoming divorce because of the special considerations involved in dividing such accounts.
Your holdings could be a combination of separate and marital property
In Colorado, equitable distribution is the standard in a divorce. If the couple can’t set their own terms outside of court, a judge will look at their family circumstances and figure out how to split the marital assets fairly between the two of them.
It is common for people to continue adding to the same investment accounts throughout their adult lives. That might mean that an investment account you started before marriage has since continued to grow with new investments of your resources. You may need to go over your investment records very closely to determine what portion of them are separate property and what will be marital property that you have to divide.
When you divorce isn’t always the right time to liquidate investments
One of the main reasons that you diversify your finances is because markets are unpredictable. Unfortunately, that could mean that when you divorce, the stock that you hold is trending far lower than it does on average. Couples with substantial Investments may need to reconsider their approach to investment accounts because liquidating them to split their value may not be in their best interest.
Splitting the account could lead to penalties
Depending on how you’ve invested and the kinds of accounts you use, splitting the account could mean penalties or fees. Especially for taxable accounts, you need to make sure that you handle the process carefully to minimize your losses and liabilities while still fairly splitting the assets within them as necessary.
Understanding your rights in the Colorado divorce and the unique concerns Investments can create and help you approach property division appropriately.