There are many reasons Ohio spouses choose to end their marriage. As difficult as the decision to divorce may be, it is often a choice in everyone’s best interests.
You are likely to have concerns about how a divorce will affect your finances, particularly your investment accounts. As you prepare for your upcoming divorce, these tips can help you successfully handle your investments:
- Obtain access to all accounts
- Update beneficiary information
- Explore tax consequences
As one of the first steps in the divorce process, you and your spouse will be asked to submit financial disclosures. These are documents detailing all information about your finances.
Know your situation
If you know that certain investment accounts exist but are not sure of the specific details surrounding the accounts, get them. Obtain any necessary login information to access the accounts.
There may be investment accounts that you cannot access because your name is not on them. These accounts are still considered marital property, and you may be entitled to a portion of them. Your spouse is obligated to provide all information on accounts you cannot access so they can be considered in the overall property information.
For accounts you have control over, update your beneficiary information. Your spouse may be a beneficiary on your investment accounts and designating another beneficiary can help prevent issues postdivorce.
Property division during divorce often has tax ramifications. Splitting an investment account could be viewed as a withdrawal, subject to tax penalties, while selling shares of certain types of accounts can result in capital gains taxes. Discussing any potential tax consequences with a divorce attorney can help you make the best decision.
Just as there are many different types of investment accounts, there are various ways these accounts are split during a divorce. Each investment account will probably have its own set of rules and guidelines for division and a specific document, such as a qualified domestic relations order (QDRO), might be necessary for a proper division.
Asset division during divorce can be complex. A qualified professional can help ensure that your investments remain valuable postdivorce.