Knowing when to divide stocks during a divorce can be a challenge, especially when the market is unpredictable. It is particularly important when talking about retirement accounts that need to be divided appropriately so the division does not create a tax burden.
What to Consider When Dividing Stocks
The financial advisor needs to make sure that the split is done in such a way that the parties will not be subject to income tax or penalties if they have an early distribution of their investment accounts.
The financial advisor will have knowledge and intuition about the best time to divide the stocks. The advisor should be able to tell you to:
- Split the accounts in the down market, but stay in the same position and ride the wave back up; or
- Tell you to transfer the portfolio, reallocate out the portfolio, and maybe sell off some of the positions.
The biggest takeaway should be to speak to a financial advisor who can give you a better idea as to, “Should we transfer over the assets with the holdings that are there? Or should we transfer them and sell them?”
Collaborative Divorce and Dividing Stocks
Speaking with a professional is one way to help you make good decisions. During a Collaborative Divorce, the divorcing couple meets with a team of professionals who guide them through the decision-making process.
When it comes to dividing stock and other financial issues, a neutral financial professional is part of the team. The professional helps the couple with every financial aspect of dividing all the assets, not just the stock.
The professional helps with determining child support and spousal support, who gets the family home, how to allocate assets so that the division is equal, and how to sort separate property from community property.
When it comes to advising you about selling stocks, the financial advisor will have a full picture of your entire financial situation, which puts the advisor in a good position to advise you on how to deal with your stocks.
For more information about the best time to divide your stocks during the divorce process, and to speak with a financial professional, contact us at Heberger & Company An Accountancy Corporation. You can also call us at 559-227-9772.
From the Blog
Tax Issues to Look Out for in a California Divorce
Married couples going through a divorce that is not yet final on the last day of the year are often confused about how to file their tax returns. The major thing to realize is that they are still married in the eyes of the IRS for their federal taxes and in the eyes of the California Franchise Tax Board for filing California taxes. This means they cannot file under single status because they … [Read More...]
Get in Touch
