During the Divorce, Should You Take the Investments…Or Cash?

Every estate is different and will require you to make unique choices when it comes to negotiating a divorce settlement with your spouse. The more complex your estate is, the trickier it can be to know what a fair division of assets is. What happens if your husband has lots of investments that may pay out big in the future? Should you take the risk or ask for cash instead?

Make Sure You Fully Understand the Investments

Investments can come in all different shapes and sizes. For example, your husband could have thousands of dollars of gold bullion stashed under the bed. He could be in a variety of different mutual funds or even be “playing the market” by investing in commodities or trying to short certain industries. He could also own a stake in a business or property that he claims will one day be worth ten times its original value.

Your first step before making any decisions is to clearly document what types of investments your husband owns. (Learn where to search for hidden assets during divorce.) You may be surprised when you start digging at what you’ll find! It isn’t uncommon for spouses to buy property or collectibles or even gold or silver bullion without their partners being aware of it.

Determining the Value of the Investments

Your husband may claim that his 80 shares in a Vietnamese copper mining company are going to skyrocket in value in the next five years. Should you believe him and accept half his shares in exchange for giving him the vacation home? Not so fast! Before you even sit down at the negotiating table, you must get an outside, third-party assessment of the true value of any investments you and your husband own. This may mean hiring financial specialists. It’s worth the cost.

Those 80 shares could mean millions for you in the future, or pennies. There could also be hidden tax consequences of taking that investment.  A financial specialist won’t be able to give you any guarantees on the future performance of any specific investment, but they should be able to give you a current estimate of the investment’s worth and help you understand its risks.

How Much Risk Are You Willing to Take?

Every investment comes with a risk, but you need to know what that risk is before you can make an educated decision on what types of investments you may want to accept in your divorce negotiation. You must also understand your own appetite for risk and what your future financial needs will be after your divorce.

Even if a piece of property is predicted to double in value in ten years, can you afford to wait that long when you may need to put a down payment on a house next year? Can you afford to take those 40 shares of the Vietnamese copper mine and lose everything if the operation goes bust? If not, then it is probably a better idea to demand more liquid assets that you can use immediately to finance your new life.

Before you make any decisions, work with a financial consultant who specializes in divorce. This professional can help you better assess your unique situation. A great way to meet experienced divorce attorneys and divorce financial consultants is at the next Second Saturday Divorce Workshop in your area. Also, here’s a great article on other unique assets you shouldn’t overlook in your divorce.

Comments

  1. I was married 14 years he still paying my bills till I see if I can get disability.the home is still in both are names can I get help with his social security im fifty and he’s seventy thrwe.can his kids take my home if he would die every thing is in both our names he legally adopted my daughter she is older now like twenty four

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