In addition to a family home and real estate, investment accounts—including those related to retirement, are often among an individual’s and couple’s biggest assets. It’s important, therefore, that individuals who are planning or going through a divorce understand issues that may affect the division and value of their investment accounts.
Ideally, an individual should take steps to gain a comprehensive picture of his or her total assets and liabilities prior to the start of divorce proceedings. Taking stock of existing checking, savings, investment and retirement accounts as well as credit card debt and tax information allows an individual to identify and tally up assets and also take stock of any existing debts which will also likely need to be paid off or divided in a divorce settlement.
For spouses who weren’t as involved or involved at all in financial planning and investment decisions during a marriage, attempting to get a firm grasp on such matters during a divorce can be overwhelming and intimidating. It may, therefore, make sense to hire a forensic accountant who can help identify all known assets as well as uncover any hidden assets that a soon-to-be ex-spouse may attempt to squirrel away.
When contemplating how to divide up investment accounts, it’s important to be aware that not all accounts are created equal in terms of how they are vested, taxed and valued. For example, a home that is appraised at $500,000 is not equal in value to an IRA retirement account valued at $500,000. Prior to making decisions about or agreeing to terms related to the division of investment assets, it’s very important to seek the advice of an attorney who has helped other individuals going through complex and high-asset divorces.
Source: U.S. News & World Report, “10 Tips for Handling Investments and Divorce,” Lou Carlozo, Jan. 4, 2016