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Investment Accounts in Divorce

Our Experienced Fort Collins Divorce Lawyer Advocates for Clients’ Interests

Do you own stock and other complex investment accounts? Do you have an IRA, 401K or other retirement savings? Are you worried what will happen to the assets in these accounts in your divorce? Whether these assets are subject to division with your spouse when you divorce depends on a variety of factors, including when they were opened, such as before or after marriage, whether and when they have appreciated, and whether your spouse has also contributed to funding them.

Our experienced Fort Collins divorce lawyers can advise you about your investment accounts and how they may be handled in divorce based on your situation. At The Cossitt Law Firm, LLC, we are well-versed in Colorado law that governs asset division and all the other issues of divorce. When you work with us, you can rely on receiving responsive and reliable legal guidance targeted to your individual circumstances. 

Get experienced legal guidance when you are undergoing divorce and face having complex financial investments divided. Contact The Cossitt Law Firm to schedule a consultation.

How Are Investments Divided in a Divorce?

Like other marital property, financial investments are subject to being divided between spouses if they were gained during marriage. Marital property is generally considered to be property that one or both spouses acquired after marriage and before legal separation. Separate assets that spouses had before marriage are generally not subject to division, although gains on investments that occur after marriage may be, even if you opened the investment account before you married.

Equitable Distribution of Investment Assets

In accordance with Colorado statute § 14-10-113, all marital property, including investments and retirement accounts, is divided using the rule of equitable distribution. In equitable distribution, judges will look at a variety of factors to decide how to fairly divide your investment assets. Equitable distribution does not mean that everything will be divided 50/50. Rather, your entire financial asset and debt picture will be examined to determine a fair and equitable division for both you and your spouse. Factors judges typically consider include the following:

  • Each spouse’s financial situation
  • Each spouse’s contribution to acquiring the investment assets
  • How investment accounts have increased or decreased during the marriage
  • Value of investments attributed to each spouse
  • Tax consequences to each spouse
  • And any other relevant factors.

These are the factors a judge will use in dividing your investments. Depending upon your relationship with your soon-to-be-ex spouse, you may be able to have more control about how investments are divided by negotiating a settlement agreement. If you are able to come to agreement, you can avoid going to court and having a judge make this important decision for you. 

Reach Out to Experienced Divorce Lawyers in Colorado

Our experienced divorce lawyers are skilled at negotiating fair property and investment division agreements for clients. We may be able to do the same for you. However, we know that sometimes spouses simply cannot come to agreement. 

If this is the case in your situation, we will be your strong and trustworthy legal advocate before the court as we seek to get you the most satisfactory investment division decision possible. Contact today to speak with a skilled Colorado divorce attorney. 

Why Choose The Cossitt Law Firm?

Decisions made during divorce can be life-altering, both personally and financially. The divorce attorney you choose to help you during this sensitive and dynamic time can make the difference when it comes to getting the positive outcome you need in dividing investment accounts. 

At The Cossitt Law Firm, our award-winning attorneys focus exclusively on divorce, property division and other related family law issues, which means we are not distracted by other types of legal matters. Our attorneys are highly recognized in the Northern Colorado legal community for their commitment to client service. Our team has extensive experience practicing in all areas of domestic law in the state, including navigating the legal intricacies of property division. 

When you choose us to handle your complex legal case, you can rely on us to listen carefully to your needs and goals and provide effective and tailored advice for your circumstances. Read here what satisfied clients have to say about The Cossitt Law Firm.  

How Our Property Division Lawyers in Colorado Can Help You

Dividing investments in divorce is often a complicated process because of the complexity of these financial vehicles and the potential tax consequences involved. This can be especially true for high-income couples  with large and diverse portfolios made up of stocks, bonds, mutual funds, international assets and other complex investments.

In any case, before assets can be divided it must be established whether an investment account is separate property or marital property. Doing this may not be as simple as it seems on the surface. For example, suppose you have a brokerage account you opened before you were married. During your marriage you may have contributed more to the account and the investment continued to appreciate over time. What you made on the investment during your marriage may now be considered marital property. 

A divorce attorney from our firm can help you determine what a judge may consider separate property or marital property for your unique circumstances. We can help you negotiate a settlement agreement with your spouse or, if your divorce goes to trial, seek to influence the judge in a way that is fair and favorable to you when it comes to investment asset division. 

Tax Consequences of Dividing Investment Accounts

There are differing tax consequences to dividing investment accounts based on the type of account and how taxes are treated. For example, contributions to some types of retirement accounts are made before taxes and withdrawals are taxed. For other types of retirement accounts, contributions are made after taxes have been taken and withdrawals are not taxed. When you have investment accounts that may be divided between you and your spouse, consideration needs to be made for how and when an investment account is taxed so that investments and tax liabilities can be fairly divided. 

Because investments are complicated and tax laws change frequently, when dividing investments in divorce it is important to get guidance from a Certified Public Accountant or other tax expert with in-depth understanding of state and federal tax laws. Our law firm provides comprehensive support to clients and can help you in identifying a skilled CPA or other tax or financial professional from our trusted referral network in the Fort Collins area.   

Division of Retirement Accounts in Divorce 

Generally, the money you had in your retirement account before marriage is considered separate property so will not be divided. However, contributions and appreciation on the account after the date of your marriage may be considered marital property and be subject to division. 

As part of equitable distribution, the judge would probably look at the overall financial pictures of you and your spouse and the value of each of your individual retirement accounts to determine whether to divide gains made since the marriage on either of your accounts. If the amount of money in accounts is fairly equal, the judge may rule that each of you should keep the monies in your own accounts without any division.  

If, as an example, your spouse has significantly more money in their retirement account than you have in yours, or if you don’t have a retirement account at all, the judge might award you other marital assets equal to your interest in the retirement plan. Or you could have a Qualified Domestic Relations Order (QDRO) put in place that allows you to get a lump sum of retirement savings or draw on a share of benefits when they are paid upon retirement. If you are the party with a significantly larger retirement account than your spouse, you may be ordered to pay your spouse a specific amount or your spouse may be given other marital assets. Speak to our skilled divorce lawyer in Fort Collins to understand how your retirement account may be affected by your divorce and potential ways to protect it. 

When you are wondering what will happen to your investment accounts in divorce, call our experienced Fort Collins divorce attorney at The Cossitt Law Firm.

Protecting Investment Accounts in a Divorce

There are several steps to take to protect investments in a divorce. You can even put protections in place before and during your marriage, even if divorce is not on the horizon at that time. 

Educate Yourself about Investments You Have Jointly and Separately

To protect your investment accounts and help ensure that you get a fair division in a divorce, be educated about what accounts you have, when they were opened, whose name or names they are in, what each of you has contributed to and withdrawn from accounts and what is in accounts on the date of your marital separation. Get account numbers and contact information for each account. Do some research to find out if you have decision-making authority on accounts, including the ability to place holds on them. 

Consider Having Accounts Frozen by the Court 

Keeping a close eye on account activity will also help you flag whether your spouse has divested any money from joint investments. To prevent this from potentially happening, especially if you are experiencing a contentious divorce, you may be able to have your investment accounts frozen by the court when you file for divorce. Of course, this will mean that you cannot access the accounts either, but if you suspect your spouse could try to move money, it can stop that from happening.  

Plan Ahead to Protect Investment Accounts

You can also protect your investment accounts should your marriage end in divorce by planning ahead. While nobody wants to go into marriage expecting to divorce, it is a fact that many marriages do not survive. Consider prenuptial or postnuptial agreements to keep separate investment accounts or gains earned on accounts during marriage from being considered marital property. Avoid commingling separate investment accounts during marriage.

Get Advice from a Knowledgeable Family Lawyer 

Finally, get targeted legal advice about protecting your investment accounts in divorce based upon your unique circumstances. No two marriages are alike, and every divorce has its own unique issues when it comes to protecting and dividing investments. Our attorneys will seek to reach settlements between spouses as to who will get which investments when that is a possibility. We are always prepared to go to court if reaching a settlement is not a possibility or if negotiations fall through. 

And one other note: If you do not want your investment accounts going to your ex-spouse in future, do not forget to change beneficiary information on your separate investment accounts and marital accounts you have negotiated to keep or have been awarded by a judge when you are divorcing. 

Wondering What Will Happen to Your Investment Accounts in Divorce? Reach Out to an Experienced Divorce Lawyer for Assistance.

When you have worked hard to earn money to invest for your retirement or another life goal, the thought of losing a significant amount of it in divorce is hard to swallow. At The Cossitt Law Firm in Fort Collins, we help Northern Colorado clients get the best possible outcomes throughout all phases of divorce, including when it comes to the division of investments and other assets. Dividing investments is a complex process that must be done carefully to ensure that you do not lose undue amounts of money or suffer unfair tax consequences. In addition to providing knowledgeable legal advice related to property division, we bring in highly skilled investment and tax professionals to review accounts and deliver expert financial guidance about the effects of dividing investments. Contact us for help with investment division concerns and assistance with other issues in divorce. Our attorneys offer the full range of divorce and family law services to clients throughout the Fort Collins, Greeley and Boulder areas.

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