Finances and divorce are complex issues. Pensions, 401k’s, IRA’s, homes, and other types of property are all on the chopping block. Perhaps you need to know where to find a high-quality divorce lawyer. On the other hand, maybe you are a military spouse and need to know how to divide a military pension in a divorce. Today we’ll be exploring the topic of stocks and how they are divided in a divorce.
How Does Virginia Decide Who Gets Property In A Divorce
According to Virginia State law there are two types of property during divorce proceedings, separate property and marital property. Let’s take a quick look at the difference.
Separate property is property that was acquired by one spouse before the marriage. If the husband had a retirement account with $10,000 in it when he got married, then upon divorce, the entire amount belongs to the husband; since it was acquired before the marriage started and is therefore considered separate property.
Marital property is property that was acquired by either the husband or wife after the marriage began. If a husband and wife purchased a car during their marriage, upon divorce both parties have equal claim to the car as it is considered marital property.
How Are Stocks Divided In The Divorce
Once again according to the above information it depends on when the property was acquired. However the division part is relatively simple, the stocks are simply divided according to if they are separate or marital property. In most cases even single shares may be divided fractionally between spouses if necessary. Let’s examine some examples below.
In our first and most simple example, if the husband owned 100 shares of Apple stock before he got married, when he gets divorced those 100 shares are considered his separate property and 100% belong to him.
Secondly, and once again simply. Let’s assume the couple invested in Facebook stock together after they were married and bought 3,000 shares. Because the purchase occurred during the marriage it is considered marital property and each spouse is entitled to up to 50% or 1500 shares.
Lastly, we’ll look at a more complex situation. The wife purchased 100 shares of Apple stock before she got married. Then during the marriage they acquired an additional 300 shares of stock. Now during the divorce there are 400 shares to be divided. 100 shares are automatically the wife’s property as they were purchased before the marriage and are classified as her separate property. As for the remaining 300 shares, each spouse is entitled to up to 150 shares as that is the marital property portion of the investment portfolio.
Conclusion
Personal finances are no laughing matter. Thousands, or potentially hundreds of thousands of dollars are at stake when you are investing in the stock market. The same holds true in divorce proceedings. That’s why before considering options in a divorce it’s imperative to consult with a reputable and qualified divorce attorney before making any decisions.