Many spouses have considerable holdings in securities, stocks, and bonds. This is especially true for high-net-worth couples who would rather use their wealth to generate returns than leave it in a bank account with a low interest rate. But what happens when these spouses get divorced at an extremely volatile time for the stock market? What if the stock market is declining rapidly when the marriage falls apart? This might be more common than you think, especially since money-related stress can cause divorces in the first place. Here are some things to consider as you approach this situation:
Are Stocks Income or Assets?
The first thing you need to determine is whether your stocks will be considered “income” or “assets” for the purpose of your divorce. There is no universal answer to this question, and the classification of your investments will depend on your unique situation. In Georgia, all assets that are acquired as a direct result of work and investments during the marriage are considered marital assets. This means that the stocks are subject to equitable distribution. Judging by this general rule, it would seem that even vested stocks are considered assets since they are “earned” by employees over the course of their work. This includes stock options provided to employees as part of a payment agreement.
Things become even more complicated if you or your spouse is a full-time, professional “day trader.” In this situation, stocks may be considered income – especially since the day trader is making numerous purchases and sales within a single 24-hour period. Their income can be notoriously difficult to calculate effectively, especially during periods of extreme stock market volatility.
One of the major decisions you will need to make is whether you want to liquidate your stocks in order to divide the assets in a convenient, straightforward manner. If the stock market is declining, this decision may bring significant losses for both parties. However, delaying can cause additional issues. It may be possible to divide the stocks between spouses without liquidating them. This way, spouses can wait for the market to bounce back before selling their investments and experiencing better returns. Alternatively, one spouse can opt to wait and hold the stocks while the other might choose to sell their portion immediately.
Where Can I Find a Qualified Divorce Attorney in Georgia?
If you have been searching for an experienced divorce attorney in Georgia, look no further than Lankford & Moore Law. Over the years, we have assisted numerous divorcing spouses in our state, and we can guide you toward a post-marriage period of economic security. We know that dividing and handling stocks can be quite stressful during periods of financial turmoil. But with the right approach, you can move forward with a sense of confidence and efficiency. Book a consultation today, and we can formulate an action plan based on your unique needs.