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3 ways investments can complicate Ohio divorces

On Behalf of | May 6, 2024 | Divorce |

Spouses tend to make long-term plans with one another to ensure comfort later in life and achieve their personal goals. Investing is often an important element of a household’s financial strategy. Investments allow people to turn income and capital into secondary streams of revenue and help protect people against the financial instability that might follow shifts in the economy.

Investments overall are a smart move for married couples, but they can be a significant concern as people prepare for divorce. Investments can easily complicate divorce proceedings, and they may require more careful planning as people prepare for negotiations or hearings in family court.

Determining what is marital property

Many people begin investing as soon as they start their professional careers. Those from families with resources may have already had investments held in their name when they became adults. Those resources might remain the separate property of one spouse, making a thorough review of investment accounts crucial. Separate resources established prior to marriage or through inheritance might not be subject to division. Determining what is part of the marital estate can be a challenging part of the property division process.

Addressing the risk of hidden resources

The more diversified an investment portfolio becomes, the easier it is for someone with malicious intentions to hide assets from their spouse. Failing to disclose investments acquired during marriage but held in one spouse’s name only is a common strategy for manipulating the outcome of property division proceedings. Digital investments, offshore accounts, investment real estate and even physical resources are easy to overlook when evaluating a large marital estate. Some people even partner with forensic accountants to help them evaluate the scope of the marital estate and track down potentially hidden or overlooked property.

Valuing long-term investments

Some investments are short-term holdings. People buy a property to fix it up and flip it by reselling it within months of the acquisition. They may engage in day trading, buying and selling stocks rapidly based on market fluctuations. Other assets are long-term investments. Stock in companies with solid futures ahead of them or vacant parcels of land in areas likely to see development in 20 years are resources that can be hard to accurately value in the context of a divorce. The current fair market value may not seem reasonable to one spouse or the other, even though that is typically what the courts consider in litigated divorces.

Preparing for property division proceedings often requires careful consideration of different resources. Spouses who recognize assets that can prove more challenging to divide can plan more effectively and can pursue a fair division of their marital estates accordingly.