Divorce is a challenging and emotional process. The financial focus often falls on dividing significant assets like the family home, retirement accounts and vehicles.
However, many other valuable marital assets sometimes go unaddressed by high net worth spouses. Forgetting these can lead to significant financial consequences.
Here are some commonly missed assets that deserve your attention during a divorce:
Stock options
Stocks can be a source of tremendous wealth, even if they are not currently exercisable or vested. Many corporate employees have become millionaires through stock options that were initially valueless. Ensure you obtain complete discovery of your spouse’s employment benefits, including stock options.
Although valuing and dividing these assets can be complex, you should not ignore them. Companies often allow a constructive trust to hold the options until they vest, at which point the non-employee spouse sells them.
Capital gains and losses
Divorce has a major impact on your tax situation, making it essential to understand how past tax returns can benefit you moving forward. Handling capital losses is a key aspect, as you can carry them over into future years until fully utilized.
These capital loss carryovers are typically divided based on each spouse’s capital gains and losses. If both spouses incurred the losses jointly, they should split the carryover equally. This approach ensures that the spouse who experienced the capital loss can still take advantage of the carryover for tax deductions.
College 529 plans
529 college savings plans, set aside for your child’s future education, are often overlooked. These accounts may not feel like marital assets, but the parent who retains status as the account owner has full authority to withdraw funds.
It’s important to protect the marital funds set aside for college, especially since Colorado ends child support obligations when the child turns 19, with some exceptions. Addressing how you will manage a 529 plan post-divorce is crucial.
Airline miles and credit card points
Credit cards often contain hidden assets such as airline miles, hotel points and other rewards. If not addressed during property division, the spouse assuming the debt or the spouse whose name is on the credit account will likely keep these rewards.
These points can be worth hundreds or even thousands of dollars in travel and other rewards, so make sure to account for them in your negotiations.
Safe deposit boxes
These physical lockboxes, usually set up years ago, might contain valuable assets. Often forgotten, these boxes can hold important items that you should include in your negotiations.
Make sure you know where the key is, under whose name the deposit box is and how you can access it to agree on an appropriate division of its contents.
Divorce can be contentious, but remaining diligent and organized can help ensure a fair outcome. An attorney experienced in high-asset divorces can help identify all assets to divide, providing an equitable settlement.