Investment Accounts - How to Value and How to Divide

Personal investments: accounts or financial assets used to build wealth and achieve financial goals

Most common types of personal investments:

• Stocks
• Bonds
• Mutual Funds
• Exchange-Traded Funds (ETFs)
• Real Estate Investment Trusts (REITs)

Key features of personal investments:

• Diversification
• Risk tolerance
• Tax implications

First: Gather the Facts

• Identify the accounts, ownership and value
• Balances may fluctuate daily, so consider consistent date and later updates if needed
• Consider cost basis
• Statements or online values should provide the needed information

Second: Understand the Law

• Investments may be held jointly or individually
• Personal investments can either be kept, divided or liquidated with the proceeds shared
• In an equitable state:
  • Titling of personal investments may not matter
  • More about how the investment was purchased
  • Marital funds earned/saved during the marriage, typically shared equally
  • Non-marital from prior to marriage or gift or inheritance, typically stays with individual although the growth may be handled differently
• In a community property state:
  • Joint personal investments are typically subject to equal division
  • Individually titled investments, depending on how funded, may be considered separate property
  • Separate investments from prior to marriage or gift or inheritance, typically stays with individual although the growth could be shared
  • Consider valuation date – consistent date is often best

Special considerations

• Understand tax consequences
• Give clear instructions
• Consult financial advisor or tax professional