Dividing stocks during divorce

| Jun 16, 2021 | Divorce |

During divorce proceedings in Minnesota, courts will divide all of a couple’s marital property. Married couples commonly have joint bank accounts, but investment accounts are likely to be in only one spouse’s name. Nevertheless, courts may treat the money and open assets in a brokerage account as marital property.

Dividing active investments can be a little more confusing than dividing other types of assets. Here are some things that divorcing couples should be aware of about property division and stocks.

Approaches to division

If a court determines that the assets in a brokerage are marital property according to Minnesota law about divorce, it will divide them applying the doctrine of equitable distribution. It could order the transfer of stocks to a separate account. Alternatively, it may order monetary compensation equivalent to a spouses’ fair share.

The timing of trades

In a volatile market, the value of an investment can change from day to day. Taking money out of the market or waiting to do so could have a significant impact on value. However, individuals who are in the process of getting a divorce must take care to avoid transactions that a court could interpret as an attempt to conceal assets.

Losses

Risky investments that resulted in a loss could affect property division. A court may consider buying high-risk stocks to be somewhat like gambling and interpret it to be a waste of marital assets.

Courts will attempt to divide stocks equitably. Even if one spouse’s decision-making led to the purchase of lucrative equity, both spouses may be eligible to receive the profits.