If you purchased shares of stock while married, there is a chance that Ohio law will consider it to be part of the marital estate. This means that it will likely be subject to state property division laws. In a final settlement, the marital estate will be divided by a judge in a manner that is considered equitable to both parties.
How might a stock portfolio be divided?
There are several ways in which a stock portfolio might be divided in a divorce settlement. For instance, it’s possible that a judge will order you to liquidate your holdings and divide the proceeds from the sale. It’s also possible that you’ll be required to transfer a portion of your holdings to an account in your spouse’s name.
How do you value a stock portfolio?
It may not be in your best interest to simply take half of the value of an existing portfolio. This is because it may be worth significantly less after capital gains taxes and brokerage fees are taken into account. If you allow your spouse to keep stocks that have depreciated in value since they were purchased, you may also miss out on an opportunity to use those losses to offset other taxable income. It’s worth noting that equities inside of a 401(k) or other retirement account may be exempt from taxation if they are rolled into an IRA.
A divorce may have a significant impact on your financial health for years or decades after it becomes official. Therefore, it’s generally in your best interest to ensure that you get everything that you may be entitled to under state law. In addition to a portion of the marital estate, you may also receive spousal support payments from your former partner.
