When it comes to dividing assets in a divorce, investment accounts often play a role.
In Massachusetts, understanding what happens to investment accounts during a divorce is important for individuals navigating this challenging terrain.
In the divorce process, both parties must provide a detailed financial disclosure. This includes a comprehensive list of assets, debts and income sources. Investment accounts, whether they are individual brokerage accounts, retirement accounts or other forms of investments, fall under this disclosure requirement.
Identifying marital property
Massachusetts follows the principle of equitable distribution, meaning that the division of marital property happens fairly. Marital property includes assets acquired during the marriage. Investment accounts funded or grown during the marriage are marital property and subject to division.
Valuation and distribution
After identifying marital property, the next step involves valuing the assets, including investment accounts. Valuation is the process of determining the current worth of these accounts. The court then decides how to distribute these assets between the spouses. The goal is to achieve a fair distribution based on various factors, such as the financial contributions of each spouse during the marriage.
It is also necessary to consider the tax implications of dividing investment accounts. Some assets may have tax consequences upon transfer. Understanding these implications helps in making informed decisions about the division of assets.
Even with one of the divorce rates in the country, which was 1 divorce per 1,000 population in 2021, many couples in Massachusetts seek to dissolve a marriage. As a community property state, transparency is necessary for a fair distribution of assets.