Making financial investments during marriage is often a smart decision. Spouses want to diversify their resources instead of simply setting funds aside in a savings account. Investments can include real estate holdings, stocks and even physical assets like gold and silver that people hope may retain their value even in times of economic uncertainty.
Those investments help ensure the comfort and financial stability of the couple regardless of a downturn in the overall economy or an unexpected job loss. They can also be a concerning complication if people decide to divorce. Investment holdings can easily become a source of conflict during divorce proceedings.
Disagreements about ownership
Frequently, spouses may not agree about who actually owns investment holdings. For example, if a brokerage account is in the name of one spouse, that person might insist that their investments are their separate property. However, if they contributed to the account with marital income, then at least some of their investment resources might be marital property. Spouses often need to go over financial records carefully to clarify what belongs to either spouse separately and what is marital property that they have to share with each other.
Disputes about investment values
Some resources are easy to value. Savings accounts have a balance that people can check with a few taps on their phone. Business holdings and real property can be more difficult to accurately value. Sometimes, professional valuation is necessary to ensure that spouses set an appropriate value on their shared investment resources. They typically need to agree on a valuation date as well, as the value of resources can fluctuate drastically over time.
Uncertainty about how to divide investment holdings
Actually splitting investment holdings can be a challenging prospect. Not all investments are easy to convert to liquid capital. Actually selling or dividing the resource may not be realistic. Instead, people may need to take the value of the resource into consideration when negotiating with each other. People may need to discuss penalties and fees in cases involving retirement investments. Early withdrawals could potentially diminish the overall value of the account by a substantial amount and could cause tax complications as well.
Those with more complex marital estates may require assistance as they prepare to divide their property during a divorce. Identifying the unique issues related to specific investment holdings can help smooth what can be a contentious process.