How Are Investment Accounts Divided in an Illinois Divorce?

Today, polls have shown that nearly 62% of Americans are involved in some form of stock market investment, whether through individual stocks, mutual funds, or retirement accounts. If you’re contemplating divorce, it’s natural to worry about how these investments will be divided. This process may seem complex and intimidating, but you don’t have to face it alone. Arami Law, Inc., with over 20 years of experience, is here to shed light on how your investments will be managed so you can proceed with assurance and peace of mind.

Equitable Distribution in Illinois Divorce

In an Illinois divorce, marital assets are divided through equitable distribution. This means that assets accumulated during the marriage will be split fairly, but not necessarily equally, between both spouses. The goal is to reach a just and reasonable division based on each individual’s contributions to the marriage and financial needs.

All investment accounts acquired during the marriage are considered marital property and subject to division in an Illinois divorce. This includes any stocks, bonds, mutual funds, retirement accounts such as 401(k)s or IRAs, and other investment vehicles acquired by either spouse during the marriage. It does not matter if one spouse’s name is on the account or if it was opened prior to the marriage – as long as it accumulated during the marriage, it will be subject to division.

Factors That May Influence Division

In addition to contributions to the marriage and financial needs, other factors may influence how investment accounts are divided in an Illinois divorce. These include:

• The length of the marriage
• Each spouse’s income and earning potential
• Any non-financial contributions to the marriage, such as caregiving or homemaking
• The standard of living established during the marriage
• Non-marital assets owned by each spouse prior to the marriage

Valuing Investment Accounts

Once all marital assets have been identified, the next step is to determine their value. This is particularly important for investment accounts, as the market can fluctuate and impact their worth at any given time. In order to ensure a fair division of investments, it may be necessary to hire a financial expert or appraiser who can accurately assess the current value of each account.

Options for Dividing Investment Accounts

After the value of the accounts has been determined, they will be divided. In an Illinois divorce, there are various options for dividing investment accounts:

• One spouse keeps the entire account and offsets its value with other marital assets (e.g., real estate)
• The account is split equally between both spouses
• The account is sold, and the proceeds are divided between both spouses
• The account is liquidated, and the funds are used to pay off joint debts or to cover other expenses related to the divorce

Whatever option is chosen, it’s important to ensure that the division of investment accounts is done in a way that takes into account any potential tax implications.

Steps to Protect Your Investment Accounts

If you’re going through a divorce, taking proactive steps to protect your investment accounts is essential. Here are some strategies to safeguard your financial interests.

Document Everything

Maintain detailed records of all your investment accounts, including account statements, transaction histories, and any communications related to the accounts. This documentation will be invaluable during the division process.

Consult with Professionals

Engage the services of financial advisors, accountants, and experienced divorce attorneys who can provide guidance and ensure that your interests are protected throughout the process.

Consider Tax Implications

Understand the potential tax implications of dividing investment accounts. Certain transactions may trigger taxes, impacting the overall value of the assets you receive. Consulting with a financial expert can help you navigate these complexities.

Update Beneficiaries

It’s important to update beneficiaries on all investment accounts, insurance policies, and other estate planning documents after a divorce. If you don’t, your ex-spouse may still receive the funds in the event of your death, even if that is not your intention.

Don’t Leave Your Assets to Chance

Dividing investment accounts in an Illinois divorce may seem overwhelming at first, but with proper guidance and proactive steps, it can be navigated effectively. Remember to consult with professionals and document everything related to your investments during this process. With the proper support and knowledge, you can emerge from your divorce with a fair and equitable division of assets that sets you up for a financially secure future.  

At Arami Law, Inc., our experienced team can guide you through this challenging time, providing the support and insight you need to secure your financial future. Reach out to us today to schedule a consultation and take the first step toward a brighter future.