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How Can The Stock Market Affect Division?

On Behalf of | Feb 8, 2021 | High Asset Divorce |

The recent volatility surrounding the stock market has led many investors to reconsider their various stock portfolios. The advent of trading apps like Robinhood has allowed people to dabble in the stock market with few obstacles to their investments in stocks, options and mutual funds. Though this system has made the market more egalitarian, it’s introduced a new layer of instability. The recent Gamestop stock phenomenon has highlighted this instability, which has led many hedge funds to lose large amounts of money. 

Taking advantage of an investment opportunity

Investors know that the market doesn’t wait for your plans or provide any leeway for significant life events. Those seeking a divorce might find that this timing may not coincide with the best investment decisions to maximize gains. Stocks and other investments create a dimension of complexity for couples going through the divorce process. Though everyone’s process is different, it’s important for divorcing couples to understand the options for various investments:

Stocks: Basic stocks can be more straightforward to divide. Whatever is considered marital property is subject to equitable division in Kentucky. The number of shares can be split evenly, with any remainder stocks sold off before division. If a couple can work together amicably, they may decide to wait until the stocks in question are better-positioned for selling. 

Stock options: These holdings give employees the right to buy company stock at a set price, which may be significantly lower than a future trading price. The holder will have to determine the timespan for exercising those stock options and whether they’re willing to wait for that option or if they need to evaluate a stock option and find an alternative asset of equal value. 

Restricted stocks: These structures are company shares offered at no cost to the employee. The trouble with these stocks is that they aren’t transferable until particular agreements are met. A company’s agreement may include being in a position for a certain amount of time. 

Finding the right balance for your future

Valuing stocks can be a challenging task, given their fluctuation. If your marital property includes stock options and restricted stocks, you need to explore your options for a more equitable asset division. 

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