BROOKLYN, New York. The New York Times is reporting that greater stock volatility may be the norm in the future. The S&P 500 is reportedly down by 4.6%. Overall, stocks are down by 1.5%. If you are thinking about getting divorced, what does this volatility mean for your investments and for your divorce?
According to Forbes, it is important to first remember to make a distinction between separate property and marital property. Separate property refers to property that was owned by each spouse before the marriage. If you purchased stocks before you were married, these stocks may be yours to keep after you get divorced. However, if you purchased stocks after you were married, or if you comingled your property—that is grouped prior owned stocks with stocks purchased after you were married, many courts will consider these stocks marital property and subject to division during your divorce.
So, what happens if you need to divide your stocks? It may be incredibly important that each partner seek the advice of his or her own personal stock advisor. If stocks have increased in value since they were purchased, Forbes notes that you may be required to pay taxes on the appreciated value when the stocks sell. It is important to consider the tax burden associated with any split in stock assets.
In a volatile market, it is also important to be careful about how you decide to divide assets like stocks—and when you choose to divide these assets. Some individuals might write out that one party is entitled to X amount or X percentage. Yet, if you choose the amount and the stock market changes, you could end up with a worse deal than if you had asked for a percentage, and vice versa—it all depends on the direction the stock market goes. In some cases, the amount is a better deal than the percentage. If the stock market rebounds and you ask for a fixed amount because you are worried that the value of your portfolio will decrease, your split of stock might not be 50/50. But if the stock market goes down and you ask for a specific amount, you could end up better off than going with a percentile split. Speaking to a financial advisor may be important when making decisions about splitting stock assets, especially in a volatile market. Usually, a divorce attorney will set a specific date on which the stocks should be valued and split. Timing can be everything here.
According to U.S. News & World Report, January is the month of divorces. Individuals who may not have wanted to ruin Christmas with bad news might be breaking the news in January. However, the time to plan financially for divorce is now. In fact, with some major tax changes coming up in the new year, individuals considering divorce might be wise to speak to the qualified divorce attorneys at the Elliot Green Law Offices in Brooklyn, New York today. If you have questions about how divorce will impact your assets, like stocks, our firm can help you understand New York’s equitable division of property rules and rules regarding community and separate property. Visit us at https://www.elliotgreenlaw.com/ to learn more.
Elliot Green Law Offices
32 Court Street, Suite 404
Brooklyn, NY 11201