How are stock holdings divided in divorce?

On Behalf of | Oct 12, 2022 | Divorce |

Divorces present questions, options and many possible outcomes, depending on your individual goals. Often, property division options present the most complicated issues as property must be characterized, valued and then divided. Some property types are easy to divide, like cash accounts, but others not so much. For example, what about more complex assets, like stock holdings. How are those divided?

How is property normally divided?

New Jersey is an equitable divorce state. The distinction between equal and equitable is important because equal would presuppose a 50/50 divorce, in which the marital estate is divided evenly between both spouses. By contrast, equitable divorce gives judges the authority to decide what is fair and just to the parties involved in the divorce.

How does equitable division affect my stocks?

Another facet of state divorce law is that property you held before the marriage is excluded from property division. So, if you have a home that you solely purchased prior to the marriage, that real property is exempt from property division. Generally, all property purchased or acquired during the marriage is marital property.

Stocks are similarly situated under other financial holdings. If stocks were purchased prior to the marriage, they are exempt, and if acquired during the marriage, they are subject to division. This can become more complicated with dividends paid during the marriage, stock sales during the marriage, vestments occurring during or after the marriage, etc. Stock holdings especially come with unique tax and future implications requiring special care.

What are my options?

Divorces come with many considerations, including the understandable concern for your stock portfolio. You may have many other unique circumstances and goals, and a New Jersey attorney well-versed in family law can be an asset.

With complicated matters, such as stocks with future vestment dates, the legal issues can be very complex indeed. An attorney can also assist you in other options instead of litigation, if both parties are open to mediation or other forms of resolving dissolution of marriage.