Stocks are a great investment for many. If you and your spouse have them, you’re likely wondering what might happen to your investments after your divorce. Just like most everything in the legal world, the answer is, “it depends.”
Are the Stocks Separate or Community Property?
In Texas, community property must be divided in a divorce. Community property is property you and your spouse purchased or acquired together during the marriage. On the other hand, separate property, or property you or your spouse acquired before the marriage, isn’t eligible for division.
If you purchased stocks before your marriage, they are considered separate property. This means that, with proper documentation and proof, they’re not in danger of division. If you purchased stocks during your marriage, however, and they include both your name and your spouse’s name, they’re likely up for division.
The Division of Stocks During a Divorce
If you and your spouse can work amicably, you may be able to decide what happens to your stocks outside of the courtroom. If you’re unable to reach an agreement, a judge will need to step in. Regardless of who divides the stocks, there are two main considerations at play: valuation and division.
The first step in dividing stocks is valuation. Each stock must be valued to be divided properly. There are various methods to do this, from the intrinsic value method to the dividend discount model.
Stock valuation is complex and requires the help of a professional. We recommend reaching out to an attorney if you haven’t already.
Once valued, the stock should then be divided fairly between both parties. There are many methods of division, as well. For example, the stock can be divided 50/50 between spouses, so long as a transfer of rights is possible with each stock. Another option is to have one spouse pay cash to the other spouse for the value of a stock option, instead of splitting it.
Facing a Complex Divorce? Call the Attorneys at Albin Oldner Law, PLLC.
Divorces that include complex assets are often complicated and require the help of a skilled attorney. The attorneys at Albin Oldner Law have many years of experience in high asset divorce. To learn more about your options or to discuss your case, give us a call at (214) 423-5100 or send us a message.